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Legislative Report, Week 17, Senator Murphy, 63rd Session

Looks to me like we might actually go the distance this time – use all 80 days that the ND Constitution allows.  No one, including people who have been here over 30 years, remembers doing that since we moved from 60 to 80 days in the late 1970’s.  The hang-up has been explained to me as one in which it is not Republican vs. Democrat or House vs. Senate, but more House Republicans vs. House Republicans as that is much more a fractured caucus than the others.  All of this is difficult to see from outside of the legislative process, but if you were a lobbyist or here for some other reason on a daily basis it would become apparent.

It is not a pleasure to report that we will be funding large personal and corporate income tax reductions.  Not that they are bad things to do, but no one really demands those.  We will provide somewhere upwards of $700,000,000 in property tax relief, but in the form of school mill buy-downs, it is less concrete than many would like to see.  So, I would have preferred more property tax relief.  As I sit at my desk on the Senate floor typing this, word is that House Bill 1234 has come out of conference committee with a reduction in the extraction tax from 6.5% to 6%.  That is going to cost us $100 million the first biennium, $180 million the next, presuming 10% growth and $80/bbl.  That cost is mostly mitigated by closing the oil stripper property exemption, but the thinking that we needed to give the oil companies a tax break to take away a loophole is not Kool-Aid that I have drunk.  

Understand that this is written to you during the 78th day of this session and that 1234 might not make it out of the house.  Also that there is a proposal to have the state pay for all of the state mandated social services that are now paid for by the counties (meaning property tax).  The amounts batted around have been between $20 and $120 million.  The danger for rural areas that I see is if the state takes control of what had been locally funded, they may look for efficiencies in years to come that might centralize (in the case of Traill County) Social Services in Fargo and Grand Forks.  That would have a doubly negative effect in that our clients would need to drive out of our county and that our staff would have to either commute to work or move out of our communities.  All of the above initiatives are possibly going to be enacted in the next two days; just as likely is the scenario whereby none of them will be.

In today’s paper is the news that not only other benches above and below the Bakken (i.e., the Pronghorn) are becoming better plays, but that the recoverable barrels have just about doubled.  I find many reasons to believe that the percentage of recoverable oil in North Dakota will only grow.  Much will happen in the next 48 hours of this session and by the time you read this, the die will be cast.

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