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Creating our future rests on prioritizing the present

By Staff | Jun 22, 2012

Now that the raid on the state treasury has been curbed with defeat of a costly property tax repeal, North Dakota can start thinking seriously about strategic planning for the future.

Governor Jack Dalrymple has been expressing the belief that our oil wealth makes it possible to create our own future. A great future will materialize only if we can resist the inclination to dissipate our prosperity on tax cuts, giveaways or ballot mandates.

Before we can map out new initiatives, however, our first priority must be the needs of local governments and service organizations in western North Dakota that have been created by the industry providing us with most of this new wealth.

Ron Ness, president of the North Dakota Petroleum Council, has estimated that oil country will need $800 million to $1 billion every year for the next five years to meet costs created by oil development.

Some states have assessed impact fees on companies to help finance infrastructure needs. North Dakota already imposes a high tax so impact fees should not be a consideration unless the impact becomes so immense that it eats up the revenue generated by oil.

On the other hand, some folks are talking about a tax cut for the oil industry. They worry that our present tax of 11 percent will discourage exploration. This is not a tenable argument. The oil people knew about our tax level before coming to North Dakota and they came anyway knowing they could make a profit in spite of the tax.

After meeting the needs of the oil patch, we can start looking at investments that will create a future. The most common suggestion is upgrading the quality of the school system. We have discovered that the national one-size-fits-all No Child Left Behind goals were too much of a challenge. Around one-third of our schools flunked.

Rather than surrender to mediocrity, we now have the money to establish and finance goals that will pick up the challenge on our own terms. This would mean higher performance standards all across the board – for administrators, teachers and students.

Our institutions of higher learning can play a significant role in creating this new future if research and development money isn’t distributed on a political formula. Historically, we have nursed the idea that when money is handed out every institution ought to get some, whether they can produce economic benefits or not. The new future requires new money to be focused on results.

Another major priority needs to be economic development on an imaginative scale. The state constitution authorizes the state and its political subdivisions to engage in every imaginable venture except liquor. That’s how we got the Bank of North Dakota and the State Mill, not that we need a new era of socialism. But if private enterprise won’t do it, the state should.

Creative economic development belongs more in the purview of business experts than solely in the hands of political policymakers. The state would be wise to call on successful ex-North Dakotans to join local entrepreneurs in brainstorming a new economic development agenda on a scale never before imagined.

The fourth priority should be tax reform with the goal of creating balanced revenue system based on legitimate allocation of the burden for the public services needed for creating our own future.

The governor is right. We can create our own future. To do so, however, will require the discipline to avoid dissipation of the state’s newfound wealth in favor of long-term investments that will provide a new economic base after the oil is gone.

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