Posted 1/13/15 (Tue)
By Neal A. Shiopman
As the North Dakota Legislature starts to get down to business this week, two keys bills will be heard by the Senate Appropriations Committee on Friday that will provide oil-impacted cities and counties a running start on meeting their infrastructure needs for the next two years.
The two bills, Senate Bill 2103 and Senate Bill 2126, are very similar in that they contain an emergency clause which would mean that the dollars would become available for distribution to the impacted cities, counties, schools and townships as soon as the governor signs the bills. SB2103, commonly referred to as the “surge” plan, has $845 million earmarked and targeted for infrastructure needs, while SB2126, known as the “jumpstart” plan, allocates $550 million to the same entities, as well as other state agencies to assist in building the infrastructure needed because of the impacts of the oil industry.
The key difference between the two is that SB2103 could be approved earlier than SB2126, which is crucial to the cities, counties, townships and school districts who are finalizing bidding documents now, so that they can start construction this spring.
While the passage of either of these two bills is critical for early construction, perhaps the bill that will be the most important for cities, like Watford City, and counties, like McKenzie County, will be the legislation that changes the formula used in the distribution of the state’s Gross Production Tax (GPT) to favor oil-producing counties.
Currently, local government is only receiving 25 percent of the GPT, but as is being proposed by Gov. Dalrymple and is being supported by many North Dakota legislators, that split would increase to 60 percent for the next two legislative sessions.
The idea behind the change in the GPT formula is to infuse more money into the parts of the state that are suffering the greatest impact from the development of the state’s oil and gas industry.
With Watford City looking at over $350 million in needed infrastructure costs to meet its projected population of 17,000 city residents, and McKenzie County looking at hundreds of millions of dollars to upgrade roads and to build a new jail facility, the change in the GPT formula is necessary for local government to begin to catch up on the projects that never can be done because of the lack of funds.
As local elected officials have told legislators and the governor on countless occasions, the combination of the surge funding and the change in the GPT formula will allow Watford City and McKenzie County, which have borne the brunt of the energy development, to get whole again by 2020. We will be able to build roads and provide water and sewer lines to the residential and commercial developments that are being developed.
For the past two legislative sessions, the “oil patch” region of the North Dakota has pretty much taken it on the chin when it came to state help. While North Dakota’s coffers were being filled with hundreds of millions of tax dollars coming straight from the counties like McKenzie County, less than eight percent of the oil taxes that were generated here were being returned to help local government maintain and build our local roads or help with all of the other demands for service.
This session, Gov. Dalrymple and many legislators promised that they would do a better job of taking care of the needs of the oil-producing region of western North Dakota.
The prompt passage of SB2103, as well as the legislation that would provide 60 percent of the state’s Gross Production Taxes to counties in which the oil and gas was produced would be a great start in restoring the quality of life to this region of the state.
A promise made should be a promise kept.