Legislative Report, Week 17, Rep. Rick Holman, 4-22-15
Two years ago, the state had sufficient funds to build new buildings, provide property tax relief, increase funding for schools and improve and maintain our system of roads and bridges. I believe that most people want that to continue.
Throughout this session we have been dealing with limitations on revenue created by lower oil production. SB 2349, which passed last week, will cut North Dakotas income tax rates by ten percent and corporate rates by five percent. The tax cuts are similar to those Governor Dalrymple proposed in his executive budget in which he recommended a one-hundred million dollar (ten percent) cut in individual income taxes and twenty-five million dollars (4.8 percent) in corporate tax relief. Supporters of the bill said the tax reduction should save about two hundred dollars for a single person earning approximately thirty-seven thousand dollars and a tax reduction of about three hundred dollars for a middle income family.
Yesterday the House passed HB 1476, a delayed bill, to eliminate the tax exemption which could be triggered by low oil prices; lower prices which could cost the state billions of revenues in future biennium. Currently, the exemption to the state’s 6.5 percent extraction tax is on pace to trigger June 1st. The Republican leadership, last week, introduced the proposal which would turn that trigger from a temporary elimination into a permanent 4.5 percent. Instead of a flexible tax rate based on oil prices the state will have, when combined with the 5 percent oil production tax, a permanent 9.5 percent oil tax, lowered from the previous flexible 11.5%. The oil price returns to previous levels, the state income from oil will be lowered by 30%. Instead of going back up when the oil price goes up, the lower tax will stay in effect, costing the state billions in future revenue jeopardizing much of what we have accomplished in the last two sessions. Two areas that could be impacted are the increased school funding with related property tax relief and the surge funding for our transportation system. Some long term projections have the loss in state income and resulting gain for the oil producers at over a million dollars a day. This seems like a short term solution with long term consequences.
HB 1151: The Challenge Grants for Higher Ed which encouraged private donations toward scholarships will continue. Currently it’s at 21 million dollars with larger amounts going to UND and NDSU but significant amounts to the other nine schools. Donors to their college of choice receive tax advantages while the state provides matching funds. Good for schools and good for students.
This morning we finished work on HB 1004, the Health Department budget. The original request considered the increased needs in EMS services, the increased need for inspections, and increased needs for health related services. The House amendments lowered the budget, the Senate amendments raised them and the conference committee found middle ground. I believe that we could have done more so voted against the budget in committee. It passed conference committee by a vote of four to two.
I hope that next week I will be able to write about what this 64th Legislative Session accomplished, or did not accomplish. Until then, thanks for reading these posts….
Rep. Rick Holman, ND District 20. 701.238.1124 email@example.com.