Under supermajority scheme, 30% cut would have taken effect in July, costing state millions.

(FARGO, ND – October 24, 2014) – At a news conference in Fargo today, North Dakota Democratic-NPL Senate Leader Mac Schneider (District 42, Grand Forks) called out the Republican supermajority for deliberately misleading voters about Republican efforts in the 2013 legislature to cut the oil extraction tax. Several Democratic-NPL legislative candidates from throughout eastern North Dakota joined Schneider at the event.

“North Dakota Democrats are here to set the record straight: Every member of the Senate Republican supermajority voted for Senate Bill 2336, a bill which would have slashed the oil extraction tax by 30%. As estimated by the Tax Department, that would have cost North Dakota $1.3 billion in the first five years alone. Not only did every Republican senator vote for final passage of the bill, they also – specifically and deliberately – voted on subdivision ‘E’ of the bill, which contained only the 30% cut to the extraction tax. Over in the House, the Republican supermajority voted for House Bill 1234, an arguably more flawed proposal to cut the oil extraction tax,” stated Schneider.

“Republican senators – every last one of them – voted to squander the opportunity this energy boom has provided our state with their votes to cut the oil extraction tax by 30%. It would have cost our citizens and future generations literally tens of billions of dollars over the coming decades. At the time, they called their proposal a mere ‘restructuring’ of oil taxes. Now that they are on the campaign trail, we’ve seen an even more disturbing lack of candor.”

Senator Schneider cited specific examples where Republican senators Larry Luick, Margaret Sitte, and Lonnie Laffen have misled the voters on their vote to cut the oil extraction tax. “In their comments and campaign materials, Senators Luick, Sitte, and Laffen are displaying a stunning disregard for the truth.” (SEE BELOW)

Schneider said that hindsight has proven the Republican supermajority’s scheme to even be more radical and reckless. “North Dakotans need to know that Section 5 of SB 2336 made the 30% cut to the oil extraction tax effective in 2017 ‘or beginning on the first day of the first calendar quarter beginning after a period of three consecutive calendar months in which average daily statewide production exceeds one million barrels per day, whichever occurs first.’ North Dakota hit 1,000,000 in April. We’ve never dipped below that. So, had SB 2336 been enacted into law, we would have seen a 30% cut to the extraction tax not in 2017, but in July of this year. That would have resulted in less money for roads, impacted communities, and schools.”

“Public outcry prevented the Republican supermajority from enacting their scheme,” said Schneider. “But when you get caught sticking your hand in the cookie jar, you don’t get credit for pulling it out. We know that if the Republican supermajority gets their way next session, they will take another run at cutting the extraction tax. What will stop them? Political balance and legislators committed to enacting common sense solutions that will benefit future generations.”

Schneider concluded: “North Dakota Democrats support and value the oil industry. We recognize the hard work and risk that have gone into making North Dakota’s oil recoverable and profitable. We appreciate the jobs and unprecedented opportunity that oil development has created. North Dakota Democrats are pro-oil. We simply believe we should capitalize on this one-time harvest by investing in our infrastructure, early childhood education, and affordable college education. North Dakota Democrats believe today’s good fortune equates to an intergenerational opportunity – one that can either be maximized or squandered.”

Senate Republican whoppers on their votes to cut the oil extraction tax by 30%

Senator Larry Luick (District 25, Wahpeton) – Candidate forum, September 25, 2014 [1]

• “I was, in our caucuses in Bismarck, I was against any type of oil . . . tax benefit or reducing those extraction taxes whatsoever.”

• “. . . I’m not in favor of any type of reduction on that oil extraction tax whatsoever.”

Senator Margaret Sitte (District 35, Bismarck) – Campaign flyers, obtained on approximately October 15, 2014 [2]

• Flatly denies voting for SB 2336 by claiming her opponent “is not telling the truth.”

• Boldly claims to have voted to “increase oil taxes by $220 million[.]”

Senator Lonnie Laffen (District 43, Grand Forks) – Candidate forum, October 23, 2014 [3]

• “Laffen rebutted by saying the bill was proposed to help close a tax loophole that oil companies would be able to use in the future to avoid taxes.”

The Truth: Every member of the Senate GOP majority not only voted for final passage of SB 2336,[4] but also specifically “Division E” of that legislation.[5] That “division” contained only section 5 of the bill, which would have reduced the oil extraction tax by about 30% (from 6.5% to 4.5%) starting in 2017 “or beginning on the first day of the first calendar quarter beginning after a period of three consecutive calendar months in which average daily statewide production exceeds one million barrels per day, whichever occurs first.”[6]

Statewide oil production topped 1,000,000 barrels of oil per day in April of 2014 and has remained above that mark ever since,[7] meaning the 30% cut to the extraction tax would have taken effect the first day of the third calendar quarter of 2014, i.e., July.

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[1] “Luick Forum Video”

[2] See attached.

[3] Grand Forks Herald, “ND state candidates discuss tax relief, education.” October 23, 2014.

[4] North Dakota Senate Journal, page 609. February 26, 2013.

[5] North Dakota Senate Journal, page 609. February 26, 2013.

[6] SB 2336, Section 5, version 13.0417.05000.

[7] U.S. Energy Information Administration.

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From:: Dem-NPL News