Last year, as we headed into the North Dakota Republican Convention and the primary season, North Dakota’s budget was a hot topic. Chief among the discussion was the problematic spending increases of the legislature and whether the 2017 legislative session would require them to raise taxes to compensate for slumping oil and Ag commodity prices.
Key leaders in the North Dakota Republican Party made it very clear that raising taxes wasn’t an option– something House Majority Leader Al Carlson reiterated today. In fact, the three Republican gubernatorial candidates at the time (Wayne Stenehjem, Rick C. Becker, and Doug Burgum) all committed to not raising taxes.
As we sit here just past the half-way point of the 2017 session, we can now reflect on the budget shortfall dealt with last August – which resulted in a Special Legislative Session – and look ahead to what appears to be a grim revenue forecast released today and wonder how our representatives in Bismarck are going to deal with this.
This morning Governor Doug Burgum introduced an updated revenue forecast. It’s not pretty… at all. Just since January we are seeing another $46 million shortfall for the 2015-2017 biennium. And projections now put the 2017-2019 biennium at a $103 million shortfall. Perhaps the most troubling part of the forecast is the projection that oil will be $47.50/barrel for the 2017-2019 biennium. I think that’s too optimistic. I hope legislators base their budget on a far lower projection. It would be irresponsible not to.
Mike McFeely (a Democrat), over at the Forum, recently wrote an article suggesting that North Dakota could ease it’s pain by raising taxes– the very thing Republicans said they wouldn’t do. And while Republicans haven’t raised existing taxes, have they violated the spirit of their commitment not to do so by entertaining the idea of creating new ones?
Back in January, news came to light that House Bill 1130 was proposing what amounted to a tax on senior citizens in nursing homes. While the bill died a quick death by a vote of 1-89, it was part of Governor Burgum’s budget proposal. But we won’t judge the legislative body for the poor judgment of their party’s Chief Executive.
But then we have House Bill 1020 which proposed a new "royalty" (i.e. tax) on private frack water suppliers. To add insult to injury, this comes as the legislature has to bailout Western Area Water Supply (WAWS)– the private frack water suppliers government-funded competition. Unlike the nursing home tax, this bill passed the House 78-13.
Just a couple weeks ago, the Senate passed Senate Bill 2298 which proposes collecting sales tax on out of state companies selling to customers in North Dakota. This has become known as the "internet tax". Senator Oley Larsen (R – District 3) was the lone dissenting vote as it passed 44-1.
Just minutes ago, the House approved of Senate Bill 2247 which would once again legalize parking meters in North Dakota. The history behind this issue is kind of amusing. Parking meters were first banned in 1948 through a ballot measure led by an angry farmer that was ticketed. The legislature overturned the ban in 1951 only to be overturned by the farmer again through another ballot measure. Now it will go back to the Senate, because of an amendment that would require local communities to approve their use.
So, what we see here is a pattern being perpetrated by some (not all) members of the Republican majority. A pattern of coming up with new ways to tax the citizenry while not raising existing taxes. Each one of these proposals can rightfully be debated as to their appropriateness, but that would miss the fundamental point.
The fundamental point is that legislators shouldn’t be focusing so much on how to produce new means of revenue as they should be focusing on significantly reducing their spending. The very fact that there is any focus on creating new revenue tells me that many in this legislative body are reluctant to cut spending anymore than they absolutely have to. And that doesn’t bode well for the future of North Dakota and it’s citizenry.
Sources:
1. http://www.grandforksherald.com/opinion/4225838-mcfeely-nd-could-reduce-pain-doing-something-crazy-raising-taxes
2. http://bakken.com/news/id/257332/nd-house-passes-tax-private-frack-water-suppliers/
3. http://bismarcktribune.com/news/state-and-regional/north-dakota-business-groups-push-online-sales-tax-bill-call/article_e2e57952-ab69-501d-842d-0e12840932f6.html
4. http://bismarcktribune.com/news/state-and-regional/north-dakota-house-approves-lifting-ban-on-parking-meters/article_0b0fb951-df34-588a-898b-4b9724b52062.html
5. http://bismarcktribune.com/news/state-and-regional/shortfall-in-state-budget-gap-grows/article_7ef298d9-1e85-532b-830e-3ba0e60f9317.html
