Letter to the Editor

News from the Legislature: Dick Anderson

By Rep. Dick Anderson

01/13/2015

The 64th legislative session of North Dakota began on Jan. 6 with the State of the State address by Governor Jack Dalrymple. His priorities are infrastructure development and tax cuts for the citizens of North Dakota. 

The presentation also contained data showing that North Dakota is leading the nation in many financial categories. Our citizens are very satisfied with the direction our state is heading. 

The falling price of the price of oil and what it means to the revenue forecast is a concern to all involved in state government. The oil production in our state produces revenue by a two-part tax. 

There is a 5 percent production tax and a 6.5 percent oil extraction tax for a total tax of 11.5 percent. The oil extraction tax has a trigger attached to it that is a concern to legislators. 

The trigger eliminates the 6.5 extraction tax on new wells and reduces extraction tax on all other wells to 4 percent if the average monthly price of the benchmark West Texas intermediate crude falls below $55 per barrel for five consecutive months. 

With the current WTI price around $55 these triggers could be implemented and reduce oil tax collections by $5 billion in the next biennium.

Although this seems like an undesirable solution, we are still extremely fortunate to have an incredibly strong economy in the state of North Dakota. 

Fortunately, North Dakota’s economy is very diverse. The business climate we have worked hard to create will continue to cater to other industries such as agriculture, unmanned air systems, coal and tourism. 

As legislators, we are going to be more fiscally conservative and examine bills and budgets to determine where we are able to address the needs of the state. While there might be downsizing in the oil and gas industry, there are still thousands of jobs available across the state of North Dakota with many opportunities for employment. 

There will be an impact on funding in the state; however this is just a bump in the road on the way to very significant investment in the state of North Dakota.

This will be a very busy session with many hard decisions to make but I’m hoping that we will be able to keep our promise on developing and maintaining infrastructure along with property tax reductions. Next week will be extremely busy as the committee’s I’m on have a full slate of legislation to act on. 

I’m serving on the Human Service and the Energy and Natural Resources Committees which will be hearing a large number of bills.