- Associated Press - Wednesday, January 18, 2017

The Bismarck Tribune, Bismarck, Jan. 18

State, tribes need to end tax dispute

It’s somewhat like a poker game between the Three Affiliated Tribes and the state. What’s at stake is tax revenue from oil production on the Fort Berthold Indian Reservation.

The dispute involves not only revenue, but whether both sides have lost their trust in the other.

Near the end of the 2015 legislative session, legislators passed a bill that abolishes some price-based incentives in exchange for lowering the overall tax rate from 11.5 percent to 10 percent. Now, House Bill 1166 would remove the final oil tax trigger in state law. The trigger being proposed for removal would kick in if the price of oil averaged above $90 per barrel for three consecutive months, at which point the extraction tax would increase to 6 percent. It would return to 5 percent if prices dropped below $90 for three months.

One of the bill’s sponsors, Rep. Al Carlson, R-Fargo, said he didn’t like replacing the old tax trigger with a new one in 2015. Carlson argues it’s not good policy to tax a person or industry higher in stronger economic times.

Three Affiliated Tribes Chairman Mark Fox warned a House Finance and Taxation Committee hearing that the tribes didn’t like the 2015 change and are opposed to HB1166. He said the tribes weren’t consulted about the change and it violates an accord the tribes signed with the state.

Committee chairman Rep. Craig Headland, R-Montpelier, said the committee wouldn’t act on the bill until they gather more information on the revenue sharing agreement. Headland said he didn’t expect the tribes to leave the agreement despite Fox’s comment that they weren’t bluffing. He was wrong about the tribes as Fox announced Friday that the tribes voted last Wednesday to charge the higher tax. Non-tribal officials think the decision violates the revenue sharing agreement, which means both sides believe the other is in violation of the accord.

It’s another case where tribes feel they weren’t consulted by the state. It’s an argument that came up during the Standing Rock Sioux Tribe’s battle with the Dakota Access Pipeline. Headland’s correct to have the committee delay action until he fully understands the ramifications of the accord.

Fox said the tribes want the extra tax money to pay for road repairs and other impacts related to oil development. If some companies decide they don’t want to drill on the reservation, he thinks they will be replaced by other companies. North Dakota Petroleum Council President Ron Ness, however, said a higher tax rate on the reservation “creates a disadvantage for attracting investment up there.”

This is a good time for Gov. Doug Burgum to get involved. His spokesman indicated he intends to meet with legislators and the tribes. If the legislative action violates the intent of the accord, then an agreement needs to be reached with the tribes. The accord was created to be mutually beneficial to the tribes and the state. Neither side is happy with the present situation and it needs to be resolved.

It appears the state needs to do a better job of working with its tribal partners and this seems to be a good opportunity to do so. There’s no reason for either side to lose all their chips.

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Minot Daily News, Minot, Jan. 18

Mental health services a precarious budget sacrifice

This week, Gov. Doug Burgum issued the guidelines he would like to see taken up in constructing the state budget, and it notably included mental health (behavioral health) services funding to the tune of $250 million.

However, veteran journalist Mike Jacobs, reporting for the North Dakota Newspaper Association, wrote in Tuesday’s Minot Daily News that both the tight budget and the unfortunate stigma attached to mental health in general erode efforts to make it more of an issue in Bismarck and thus less likely to see sufficient funding.

Real budget restrictions are hard to get around. In the absence of desire for tax increases, it will take economic growth (likely related to oil and gas) to fund the full scope of budget needs.

That growth can’t happen quickly enough, particularly when it comes to the need for behavioral health services in the Minot area. Behavioral health services are historically underfunded in general, despite the considerable need made obvious to those who pay attention to what’s happening in our justice system. Addiction and behavioral health issues cost the public a fortune when the courts become the first backstop, the landing place for the afflicted. Furthermore, the farther one is from a major metropolitan area, the more scarce the available services. Communities in our region are therefore under-served.

Will behavioral services end up with the funding needed? It seems unlikely, but at least the need is being recognized.

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Williston Herald, Williston, Jan. 15

Treasurer’s Office still has value

A proposal that came out Monday to put the elimination of the state Treasurer’s Office on the 2018 ballot has a noble goal but is a misguided effort to save money.

One of the bill’s co-sponsors, State Sen. Tim Mathern, D-Fargo, ran last fall on the platform of eliminating the office, claiming that the office was redundant, since the Bank of North Dakota, the Tax Commissioner and the Office of Management and Budget already handle many of the state’s financial dealings.

At first glance, this seems like a persuasive argument. However, upon closer examination the case is shaky.

The four offices do perform interrelated services, but there is not, as opponents of the office claim, actual overlap. The roles for each are defined by statute and by the state constitution.

The sponsors of the bill understand this, as the vote that would go before the public in 2018 would amend numerous sections of the constitution to eliminate references to the Treasurer’s Office.

The fact is that despite the hype about smaller, more efficient government, no one is sure how much savings would be realized by eliminating the office. In fact, it isn’t clear that there would be any savings at all.

The Treasurer’s Office has constitutionally mandated functions and performs tasks that no other office currently does. That fact is recognized by the bill’s sponsors, who have also introduced a resolution that directs a study to determine the best way to transfer the functions of the Treasurer’s Office to other state agencies.

That study wouldn’t be ready until after the voters went to the polls and decided on the elimination of the Treasurer’s Office, though.

What happens if the study makes it clear that it would be more expensive, at least in the short term, to move the Treasurer’s Office functions? What if it ends up that in order to handle the Treasurer’s Office functions, other agencies would need to add staff? The state would be already committed by then.

We believe that the Treasurer’s Office fulfills an important role in the state by offering another level of checks and balances on the way the state brings in and spends money. We are, however, open to the idea that it could be replaced.

The Legislature should perform the study now, see the results and then decide whether to put the elimination up to a vote. That way voters will have all the information they need when going to the polls.

The impulse to shrink government and make operations more efficient is a noble one, and we hope it motivates other proposals this session. But cutting first and asking questions later is a recipe for disaster.

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