Posted 1/19/11 (Wed)
By Neal A. Shipman
To many people across the state or even in other parts of the country, it may seem a little difficult to comprehend how all of the cities and counties in the oil-impacted areas of North Dakota are lining up in Bismarck and asking the North Dakota Legislature for financial help.
There is no doubt that the oil boom in western North Dakota is having a very positive impact on these areas as can be attested to by the latest state report that showed a huge across-the-board increase in taxable sales and purchases. Obviously, there is a tremendous amount of new money that is pouring into the local economies which is directly benefiting retail stores, restaurants, gas stations and motels. And of course, with all of the new oil production the state of North Dakota is receiving record tax collections.
But simply because private businesses are prospering in the oil patch areas of North Dakota doesn’t mean that the local government entities, which are being asked to take care of the roads, provide new infrastructure such as water and sewer lines or to provide additional law enforcement services, are sharing in the newfound wealth.
Providing these government services that are the result of the rapidly expanding oil industry can represent a staggering sum of money. And it is not reasonable to ask the local taxpayers to pony up the millions of dollars that these local governmental entities need to meet the sudden demand for major infrastructure improvements as a result of energy development.
That is why communities and counties across the oil patch have been making their case to the Legislature that the state of North Dakota has a financial responsibility to help these areas develop the necessary infrastructure and to maintain their roads. And that argument has merit since the state treasury is the major recipient of the millions of dollars in tax revenues from the development of the oil industry in western North Dakota. It is only logical that a portion of those funds should be available to help provide road and infrastructure improvements.
So how much is it going to cost a city, like Watford City, to develop the needed infrastructure to meet the growing demand for new housing? The answer, according to a new study commissioned by the City of Watford City, is it will cost in excess of $16 million to make core improvements to the city’s water and sewer systems depending upon how much the city’s population grows.
Gov. Jack Dalrymple has provided in his budget $100 million in Oil and Gas Impact Grant Funds that would be available to cities, such as Watford City, that would allow these cities to bring water and sewer services into new residential areas so that private developers can build much needed housing. And he is proposing that millions more in state funds from the Permanent Oil Tax Trust Fund be made available to counties and townships to help them with road construction and maintenance work.
Gov. Dalrymple recognized the huge financial impact that the local governmental entities are facing as they do their part to help grow North Dakota’s economy. And now as the North Dakota Legislature considers the governor’s budget, it is important for these elected leaders to also recognize that cities, like Watford City, and counties, like McKenzie County, have already been doing everything that they can financially to meet the ever growing demands for housing and other infrastructure improvements locally.
But unfortunately, doing everything that they can do is not going to be enough. The Legislature needs to approve the governor’s recommendations for state assistance to those areas being impacted by the energy development.