State legislators and other officials met Tuesday to discuss how to invest the money in the newly created Legacy Fund.In round numbers, $300 million/year.
The fund, approved as part of a voter initiative in 2010, sets aside 30 percent of oil production and extraction taxes in a separate fund untouchable by state legislators until 2017. After that, it will take a two-thirds vote to spend from the fund.
Money will be deposited in the Legacy Fund beginning in September. According to information from the state treasurer’s office, it is projected to collect roughly $295 million in its first year. About $293 million is expected the following year.
The "key phrase" in this article: "30 percent." This represents only 30 percent of the total tax the state is taking in each year from the oil industry. And that's the "direct amount." Much more is collected from indirect taxes, including property tax, sales tax, corporate income tax, and personal income tax. Not to mention road taxes on trucks, but one can argue those fees don't cover the cost of the impact to roads and bridges.
The State needs to asses the oil wells in production a production tax at the township level to finance road repair and construction.
ReplyDeleteThe state needs to return the 12.5% production/extraction tax it gets to the townships and counties that are affected by the oil industry.
ReplyDeleteAnd the state is doing just that. I believe the state is returning $100 million to the nine oil counties in North Dakota.
My hunch is that, all things being equal, the oil industry would rather be in south Texas (Eagle Ford) than in the Bakken, North Dakota. If the economics for drilling are better in Texas than North Dakota, it doesn't take a whole lot to move the rigs south.
The good news for those who favor a strong oil economy in North Dakota: there has been little published about increasing taxes on the North Dakota oil industry.
The bad news for those who would prefer the oil industry leave North Dakota: there has been little published about increasing taxes on the North Dakota oil industry.
As inappropriately exuberant as I am about the Bakken, I would have no problem if the oil industry moved out of state to the Niobrara (Wyoming-Colorado) or the Eagle Ford (Texas) if the economics were better there.
Great Britain is learning that lesson.