Republican Gov. Jack Dalrymple wants to tap into oil revenues to provide $3.5 billion for infrastructure improvements.
His Democratic challenger, state Sen Ryan Taylor of Towner, supports allocating 40 percent of oil revenue directly to cities, counties and townships so they can handle their infrastructure needs.
The candidates in North Dakota's governor race agree that oil- and gas-producing counties need more help, but they offered differing solutions in addressing the North Dakota Association Oil & Gas Producing Counties at the group's annual meeting in Minot Thursday.
Jill Schramm/MDN • State Sen. Ryan Taylor, the Democratic candidate for governor, talks with some of the city and county representatives at the North Dakota Association of Oil & Gas Producing Counties meeting in Minot Thursday.
Jill Schramm/MDN • Representatives of cities and counties listen during a session on oil impact grants at the annual meeting of the North Dakota Association of Oil & Gas Producing Counties Thursday in Minot.
Dalrymple and his Democratic challenger, Taylor, spoke back-to-back at the meeting.
Taylor noted the state has a $1.6 billion surplus that is expected to reach $2 billion to $2.6 billion by the end of the fiscal year next June.
"I don't believe the money should have been there in the first place," he said, suggesting the Legislature should have appropriated more to political subdivisions last session.
Safety, roads among top issues in visioning process
Residents in North Dakota's oil patch are concerned about infrastructure needs, but they are also concerned about quality of life issues.
That has been among findings so far in planning being done through Vision West ND, according to Deb Nelson, a Dickinson consultant who is managing the grant-funded project. Nelson updated members of the North Dakota Oil & Gas Producing Counties on the project Thursday.
About 20 planning sessions have been held with counties and cities. A few more sessions remain, but so far, indications are high that infrastructure is a priority, followed by business retention and expansion, attracting government funding and tourism.
Quality of life concerns that participants have prioritized include public safety and emergency services, housing and child care.
Nelson said Vision West ND recently held a child-care summit and supported the funding released by the state to help some communities with child-care needs.
Vision West ND also has been providing infrastructure assessments to communities. The 20 assessments completed show that many communities in the oil patch face inadequate and aging water storage and distribution systems, water quality issues and a lack of wastewater treatment capacity.
Economic reports show communities are getting about 11 percent of oil revenues this year, he said.
"It's not enough," Taylor said. "Montana left 39 percent in the communities and Colorado left 63. Early on in our campaign, we said we are going to leave 40. That is our goal to leave 40 percent of those dollars four times more than we currently have in the communities.
"It gives you money upfront to prevent problems rather than come to Bismarck and ask for the money back," he added. "It's absolutely critical at this point in time that you don't have to wait 12 months, 15 months, to come ask for the money back. It's an eternity with the speed of development we are facing today."
Dalrymple also noted the distribution formula for oil revenue needs to be revised to give political subdivisions a greater share.
"I believe that we do need to allow every county to receive the first $5 million that they earn through the formula. Any county that is impacted at all is going to be impacted to that extent," he said. "I also believe that looking at the next two-year period, there's no question in my mind that the local funding share should not fall below 25 percent. Those needs are ongoing. They are great, and you need to able to know that you are going to get money every month."
He said he will propose increasing the energy impact fund from $135 million this biennium to $150 million next biennium.
"This is the only way we are going to focus extra dollars in a specific place," he said. Watford City was able to amass $12.3 million and Tioga $7.7 million for infrastructure because of targeting of those dollars, he said.
"They are able to get really serious dollars to do the things that they need to do," Dalrymple said. "Through any distribution formula, I don't care how you rig it up, it's not going to focus that much on one project."
Taylor believes giving counties more money upfront will alleviate demands on an impact fund. He supports continuing the fund, though, particularly to assist communities on the fringe, like Minot, that are heavily impacted but don't see much oil-tax revenue.
Taylor said he sought to get more money in the Energy Impact Fund during the special redistricting session last year. Although the Republican-controlled Legislature didn't accept his bill, legislators approved an additional $35 million for impact grants, he said.
"That's why we need a two-party system. That's why we need people with ideas. Even if their ideas aren't put forward, they push the other side to do more," he said. "That's how we got another $35 million in the impact fund."
Because of the impact on the state from economic activity, Taylor disagreed with Dalrymple's direction to state agencies to draft zero-increase budgets, with additional financial needs requested as optional funding.
"There will be lots of them. There sure ought to be," Taylor said of the optional requests. "But you know that they are not optional. They are absolutely needed."
Elements of Taylor's budget plan include $14 million to help law enforcement keep pace with population growth, $45.6 million for child-care facilities and workforce development, $20 million in state funding for Head Start and other preschool programs, $12 million for teacher salaries and $28 million in college scholarships and tuition credits for businesses that provide college benefits to employees. His plan includes $100 million for school facilities, including zero-interest loans for new school construction and a commission to assist districts in planning new schools.
Dalrymple will ask the Legislature for $2.5 billion for infrastructure statewide, which compares to the $600 million Department of Transportation budget when he took office two years ago.
"We have recommended to continue the county and township road fund. This time I am going to recommend that we have no local match required. It's silly, really, when you have the kind of needs you do to worry about a small local match," he said.
Additionally, he is proposing $1 billion for a highway infrastructure fund. The money could be used for bypasses, interchanges, four-laning and extraordinary state highway maintenance.
"Western North Dakota will do extremely well and get the lion's share of that $1 billion," Dalrymple said. "We are planning a big package for western North Dakota. We think the thing to do is stay on top of this growth, do what we have to do, use our oil funds, bring them in to build the infrastructure."
Dalrymple also proposes to make $200 million available to schools for new school construction at an interest rate as low as 1 percent. He is proposing bonus money for schools for transportation expenses.
He also wants tax credits in the Housing Incentive Fund, which increased from $3 million to $15 million this biennium, raised to $50 million in the next biennium.