Frustration Over Oil Tax Formula - KXNet.com - Bismarck/Minot/Williston/Dickinson-KXNEWS,ND

Frustration Over Oil Tax Formula

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Five months after North Dakota legislators passed unprecedented funding to address the impacts of the rapid oil boom, several cities, counties and schools are saying the new formula is not fair.

As Donnell Preskey reports local governments say the money isn't there to cover all their needs.

More wells pump in McKenzie County than anywhere in the state. Those wells equal more trucks, more people and more students. But not necessarily more money.

"We have to have quality schools if they want to stay here and raise their families here. We are seeing that student increase. We are at the point of where it is hard to stay ahead of infrastructure needs," says Watford School Superintendent Steve Holen.

Watford City School finished an expansion, and the school is already maxed out.

For the first time enrollment has topped 1,000 students and the school is looking to add a third building.

Holen says this year, his school and others lost dramatic amounts of oil production tax revenue due to the new formula.

"We believe we are a hub city by all logistical purposes we are a hub city. We are a city with over $200 million in infrastructure costs and trying to do it with state funding of 10 and 20 million at a time."

"Somebody is not getting the picture," says Mountrail County Commissioner Greg Boschee.

He says, "the gross production tax was in lieu of property tax. It's not we are stealing someone's money. It's our taxes and we aren't getting adequate return."

Boschee says Mountrail County has canceled road projects because of a lack of funding from the state level.

The formula can't be touched until legislators return in 2015, meaning impacts and bills will continue to pile up.

"Why is the state saving billions of dollars and local governments aren't supposed to have anything to pay our bills? The level of frustration is going up instead of going down," says Boschee.

Holen says, "we hope that subdivisions don't diminish the quality of life for our citizens in trying to keep up with this."

It is estimated that $258 million of the gross production taxes in 2014 will stay in local hands in western North Dakota.

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