On the heels of encouraging oil prices and production, North Dakota Republican legislators announced Thursday a $280 million funding proposal for infrastructure needs in North Dakota’s non-oil producing counties, cities and townships.
Senate Majority Leader Rich Wardner, R-Dickinson, said the proposed bill would create three new funds in the chain of “buckets” filled from oil and gas tax revenue, including $115 million for counties and townships and $115 million for cities to be filled simultaneously, with $50 million for airport infrastructure after the previous funds are capped.
Wardner said the funding would most likely be available during the second year of a biennium, owing to the funds' placement in the line of "buckets" receiving oil tax revenue.
“We’re looking at unpaved road needs. We’re looking at paved road needs. We’re looking at bridges. We’re looking at 20-year needs,” he said at a state Capitol press conference, flanked by fellow Republican lawmakers. “So that’s what this is for, is to help these political sub(division)s, using oil revenue to bring the state together to grow. That’s what our goal is.”
He emphasized the proposal excludes cities in nine oil-producing counties as well as the hub cities of Dickinson, Minot and Williston, which already receive funding from the Gross Production Tax: “They are not in this. They’re taken care of.”
Roadmap to infrastructure
Funding distributions to cities would be determined by a formula using populations and valuations, with three varying base funding levels for cities with more than 1,000 residents, Wardner said. Bismarck would receive an estimated $16.1 million in funding, for example.
“If you are a city of less than 1,000, you just get the formula, you don’t get a base payment,” Wardner said.
Rep. Mike Nathe, R-Bismarck, said the proposal turns an eye to communities around the state after legislators passed spending aimed at improvements in western North Dakota during the Bakken oil boom.
“Now is the time to start funding for the infrastructure for the rest of the state. That is what this proposed bill does,” he said.
Wardner’s and House Majority Leader Al Carlson’s proposal assumes an oil price of $52.50/bbl with production at 1.2 million daily barrels in North Dakota. If oil takes a dive as in 2016, Wardner said the state can prorate the money.
He also said the proposal’s early unveiling allows for five months to receive input. The bill is being drafted, he added.
“The core is there. That’s pretty solid. We’re not going to change that, but as we go forward we want input from people,” Wardner said.
Gov. Doug Burgum issued a statement commending the efforts to address infrastructure: “While we are still analyzing the plan, components of it appear promising, and we look forward to working with the Legislature on proposals with transformative impact that ensure taxpayer resources are invested based on need, with a focus on smart, efficient infrastructure. It’s important to note that this plan does not add dollars to the general fund over the current biennium’s level, and closing the substantial gap between ongoing revenues and ongoing expenditures remains a significant challenge for next biennium.”
State Treasurer Kelly Schmidt said the proposed legislation is “a great beginning” and noted it won’t touch the Legacy Fund’s principal.
“That’s been a concern for many of us, that that was the direction that this was taking,” she said. "I think this is good discussion."
The Legacy Fund is derived from 30 percent of the state’s oil tax revenue. Legislators can tap up to 15 percent of the fund in a biennium but only with a two-thirds vote from both the state House and Senate. Last year, lawmakers allocated $200 million in Legacy Fund earnings to balance the budget.
Wardner said the fund’s earnings could come into play for various revolving loan funds, but discussion continues.
'A great thing'
Local city and county players expressed support for the proposed legislation.
Bismarck City Commissioner Steve Marquardt said the proposal, if passed, will help the city adjust its budgets in the long term, adding he looks forward to offering input wherever needed. Mandan city administrator Jim Neubauer also said the bill would help further future projects in the city’s master plans.
Ron Day, chair of the Bismarck-Mandan Chamber of Commerce, said the bill is “a great thing for businesses.”
“Additional infrastructure, better infrastructure helps grow that business population, and that’s good for Bismarck and Mandan,” he said.
Morton County Commission Chair Bruce Strinden also commended the bill and highlighted the 1,600 miles of roads the county maintains, as well as drainages requiring bridges. He said the bill could help replace bridges constructed long ago and not designed to handle today’s trucks hauling heavier equipment.
Burleigh County Commissioner Brian Bitner said the legislation would help road needs in the county and around the state.
“When we get to the session, we’re hoping we can pass this thing,” Wardner said.