Legislative Report #6, Feb 18, 2019

Feb. 18, 2019 Legislative Report #6

Rep. Rick Holman, ND District 20

On Saturday, March 2, at 10:00 a.m., District 20 Legislators will be at the Mayville State Library. Come with questions and comments. We hope the weather will cooperate this time. 

Last week we heard two bills dealing with infrastructure. One and others deal with the source of funding. The main department bill provides the funding to support operations. It will now move to the Senate for further consideration. Here's the language that returns activity at the worksite south of Mayville.

"The Department of Transportation shall establish the Mayville Section as a satellite site of the Hillsboro section. Seasonal winter services will originate in the Courtney, Gackle, New England, and Finley if the department has an employee whose home residence is located within the vicinity of the department section site or the department hires an employee whose home residence is located within the vicinity of the maintenance section site."

Gas tax funds our roads and bridges and it has been many years since the North Dakota tax has been adjusted. The initial purpose of the gas tax federal and state was to provide the funds to develop and maintain our transportation system. Better roads and better gas mileage has made it necessary to find added funding from other taxing sources. Here's the tax for our neighboring states. Minnesota 28.6 cents per gallon, South Dakota 30, Montana 32.25 and North Dakota 23. The federal rate is 18.4. What do you think?

Another topic that is discussed in the legislative session is how we tax our oil production. The two taxes, which after being reduced in 2013, amount to 10% of the price received times the barrels of oil harvested. By attaching it to both price and production, using two variables causes wide fluctuations in the amount of money going in to the state treasury. That makes long range planning difficult. I've played with the thought that if we removed the price variable and just tied a set price to production like what is done with the gas tax, the wide swings in oil tax income would be diminished. Last month, the state's oil wells produced 1.4 million barrels of oil per day. Using a historical dollar amount for the state's share and multiplying that by the barrels of produced oil would eliminate the wide swings in oil tax income caused by price fluctuations. The discussion will continue.

The House passed a bill to reduce or eliminate income tax. Our state's income tax is lower than most except for the few states that don't have an income tax. I was reminded in a floor speech that we need to have a three-legged stool to balance our income structure. Sales tax, property tax, and income tax together create a situation that funds our state's services while allowing a certain amount of predictable security. Removing one leg from that stool makes balancing more difficult.

Another tax credit bill that failed was one that would have allowed an individual a tax credit for the costs of private schools or home schools. The state has only so much money to work with so taking dollars away from our public schools to support non-public education is questionable. I cannot support that. I was surprised at how many votes it did get.

The Governor's proposal to change the structure of Higher Education governance came to the House as a two-board plan, one for the two research universities and one for the other nine schools. As I've stated before, the single board plan has done a lot to eliminate competition and encourage cooperation between all the schools.  If changes need to be made such as adjusting terms or expanding the size of the board, that can be done.  There's also a bill in the Senate.

The funding bill for our Higher Education System passed the House this week and only had a few votes against it.  Most of the recommendations presented to the Appropriations Committee were accepted so now it moves to the Senate for further consideration. Salary increases and some infrastructure additions and much different than two years ago when the Governor asked for major cuts in funding. It's been about four years since some college employees have had a pay raise.

Thanks for listening.  Rick Holman