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Dalrymple’s grand revelation: Oil patch needs money

By   /   July 23, 2012  /   15 Comments

About five months ago, as western North Dakota was aching under the pressure of the oil boom, a well-connected Republican told me that Gov. Jack Dalrymple was planning to wait a few months before announcing a major investment of state money into things like new roads and public safety programs in the oil patch.

Waiting for what? The need for additional investment was already quite clear. And the state had just finished stashing away several hundred million dollars into various rainy day funds after meeting the budget requirements for the upcoming biennium.

Matt Bunk

My Republican friend told me the governor was waiting until summer, so his announcement would be timed just ahead of this fall’s general election. He said the governor himself acknowledged the timing would be much more beneficial, from a political standpoint, if the proposal was stalled for a few more months.

So, today, the governor followed through by announcing plans to spend $2.5 billion on road work and infrastructure projects funded by oil and gas impact grants. As part of the plan, local governments in the oil patch also will be allowed to keep a greater percentage of the revenue from the oil and gas tax.

The governor will probably say the announcement was a practical decision that came as quickly as possible. He will probably say there were no political games involved. But that’s hard to believe for many reasons.

First, the state had plenty of money and was well aware of the needs long ago. Local governments in the oil patch have been requesting more assistance for a couple of years now, with only a meager response from the state. Sure, the Legislature has invested several hundred million dollars to counties that have seen their crime skyrocket and their roads torn to shreds by large transport vehicles. But the money was not enough to get ahead of the needs, according to local leaders in the oil patch and state lawmakers from both parties, and it barely kept the infrastructure projects going while the state continued to pad its various savings accounts with an excess of $5 billion.

Second, the issue of state funding for infrastructure in western North Dakota was politicized a long time ago. Gov. Dalrymple has been taking a lot of heat for allowing the western part of the state to flounder while its oil revenue fills the coffers of state government. His opponent in the gubernatorial election, Ryan Taylor, has been touring the state for months touting plans to increase state spending for infrastructure in the oil patch.

Third, the announcement heralding Dalrymple’s plans to invest another $2.5 billion didn’t come from the Governor’s Office. It came from the governor’s re-election campaign. So it’s difficult to believe the timing of the announcement had nothing to do with the upcoming election. Even the governor’s own strategists didn’t try to hide the fact that this is a campaign issue.

Don’t get me wrong. Dalrymple’s decision to support additional investment in the oil patch is a good thing. It’s necessary if the state wants to make sure residents can continue using public roads, local law enforcement can continue fighting crime, and oil tankers can continue transporting crude to out-of-state refineries. Regardless of your political persuasion, there should be little doubt the state needs to do something significant to keep western North Dakota from falling apart at the seams.

What bothers me is that the announcement came so stinking late, long after everyone else realized more money was needed out west, and the timing was so incredibly convenient for Dalrymple as he seeks another term in office. I wish Dalrymple had proposed this new round of investment a long time ago because it makes sense, instead of waiting until now because it’s a good political move.

I also wish Dalrymple’s press release didn’t make him sound like some sort of grand visionary who stepped into the great beyond and returned with a revelation that communities in the oil patch will soon need more help from the state. After all, the same conclusion could have been drawn a year ago by reading newspaper headlines, visiting Williston or using a telephone to talk with people who live in western North Dakota.

Take this canned quote from Dalrymple’s press release, for example:

“In North Dakota we are in a position to create our future, making long-term investments in infrastructure and other priorities while still providing substantial tax relief and maintaining healthy reserves,” Gov. Dalrymple said. “Infrastructure has been an important focus of my administration, including re-engineering the Oil and Gas Impact Fund to quickly address the needs of communities in our oil and gas counties. This administration also is the first to invest state funds directly in county and township roads without any local match required. Now is the time to continue our current commitment to infrastructure with one-time investments from our cash reserves.”

Yes, governor, now is the time. Or last year. Or the year before.

-Matt Bunk is publisher of the Great Plains Examiner.

 

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15 Comments

  1. Rob says:

    For crying out loud, the state just appropriated over $1 billion to western infrastructure in the last legislative session, and most of the projects started haven’t even been completed yet.

    I’m about as outspoken a critic of Dalrymple as they come, and I’ve been banging the drum for spending on western roads for a while, but you’re not basing any of your opinions here on fact. You’ve just sort of got this feeling that we ought to have been spending more.

    Do we need “investment” (let’s stop using that word, it’s spending). Of course. But we don’t need indiscriminate spending either, and that’s exactly where opinions like the one expressed in this editorial lead.

    • Matt Bunk says:

      Rob, I didn’t write that the state should be spending more. I wrote that the spending that’s being proposed now should have come sooner. You should read my column more carefully.
      And if you don’t think the money should have been put toward roads sooner, then you should do some research into how much more money it’s going to cost the state to build roads now than it would have cost if the road work would have been contracted out two years ago. But that doesn’t even appear to be your argument here, as you mentioned you’ve been “banging on the drum for spending on western roads for a while.” So it seems like we agree on that point.
      The issue, as far as I can tell, is that you concocted the wild idea that I support “indiscriminate spending.” I don’t. Never have. Never will.

      • Travis says:

        Let’s get real guys. Nobody supports indescriminate govt spending. That’s just something Republicans say to scare people into thinking Democrats want to throw tax money out the window. Matt, have some dignity, don’t respond to this joker. He just wants to get you to stoop to his level.

      • Rob says:

        Speaking of needing to do more research, Matt, you should look into the $1 billion in appropriations approved for western roads a year ago. A fact inconvenient for your argument, I think.

      • Rob says:

        Here’s a report from the Upper Great Plains Institute issued in December of 2010, just before the 2011 legislative session. It’s title: Additional Road Investments Needed to Support Oil and Gas Production and Distribution in North Dakota

        http://www.ugpti.org/resources/downloads/2010-12_AddRoadInvToSupportOil_ExecSum.pdf

        A quote:

        “When the unpaved and paved road costs are added together, the projected
        investment need for all roads amounts to $907 million”

        The governor requested $958 million. The legislature approved over $1 billion (roughly, I’m recalling from memory).

        Now, we can debate about whether or not that’s too low, but even the people tasked with studying this thought $1 billion was enough.

        This is an extremely volatile situation, and you’re lecturing from the comfy position of 20/20 hindsight.

  2. Matt Bunk says:

    My point, Rob, is that the oil boom has been going on for the past five years, and the state has been slow to react to the needs out west. Reacting sooner would have saved money and eliminated some of the difficulties of the residents in western North Dakota. And the governor should act based on what makes the most sense, not political opportunity.
    Since the UGPI study was completed more than 18 months ago, a lot of variables have changed dramatically (the study didn’t even anticipate any inflation in its cost estimates until 2014-2015, which has turned out to be way off base). And many lawmakers knew immediately after passing the appropriations last session that more money would be needed to keep up with the demand. It costs about $5 million to build one mile of a four-lane (two in each direction) highway. And that number keeps rising as material and labor costs increase. So, really, a billion dollars seems like a lot of money but it’s not actually going to build a whole lot of road when we’re talking about an oil patch spread across a vast area of rural North Dakota.
    The bottom line is that if the governor knew there was a need to do more, and I’m told he did, then waiting to unleash this proposal was not good for the state, even though it may be good for him politically.

  3. LH says:

    I agree with you fully Matt. This could have been done long ago. In the year and a half he has been governor Jack Dalrymple has shown no sign of innovation or original thinking or speed at getting anything done. This proposal is needed now but it cannot happen until next July. Why not a special session? Make some legislators earn their salaries.

  4. Frank says:

    Matt,

    Is this “investment” you are talking about money that Dalrample already had the authority to spend via a state agency, or is this merely a spending plan that he has to propose legislature later this year?

    • Matt Bunk says:

      Some of the money was appropriated last legislative session. The rest of the money has yet to be appropriated by the Legislature. The next step for the governor would be to call a special session and get the Legislature to vote on the proposal. If no special session is called, the whole thing will have to wait until the next regular session in 2013.

      • Frank says:

        Some of the money was appropriated last session? I’m guessing that that money has either already been spent or was spoken for. I completely understand the general point that politicians distastefully, unfortunately, and crassly hold off on announcing plans or taking action just to benefit their election chances. However, I believe you took an unsupported leap when you imply that the homeliest governer in the Union withheld legitimate action. Spending authority is dominated by the legislature in ND and it’s not that easy to call a special session and hope legislators will agree with you once you get them to Bismarck. I share your concern, but I think you are a little niave or ignorant about state government machinery, and I’m not talking about politics but rather the processes and practicalities. Your article needed budget numbers, appropriations withheld, etc. Thanks.

        • Matt Bunk says:

          Frank,
          Dalrymple double-counted the appropriations from last session in his announcement. No guesswork needed on that point.
          As far as Dalrymple’s “homeliness,” I don’t see what his appearance has to do with anything.
          I know the Legislature has to approve spending, but the governor has the most power of any state elected official to control the budget agenda. House and Senate leadership also play a large role. The House speaker told me in December that there’s no doubt the state will need to put more money toward western infrastructure, so Dalrymple already has at least one powerful Republican in his corner. The real reason nobody wants to come back for a special session is because the election is this fall, which I find to be a poor excuse.
          If you want additional information on budget numbers, you can reference past articles on this website or any other media source that covered the legislative budget process during the 2011 regular and special sessions. I didn’t include the financials here because the column would have been twice as long as it is.
          Also, I’ve spent the past six years managing newspaper coverage of state legislatures and Congress, so I’m well aware of the process, parliamentary procedure and “machinery.”

          • Frank says:

            Once again, I agree with the general point that politicians make announcements and take or withhold action to serve themselves and that’s wrong. But your article was implying that Jack D was withholding money at a crucial time. I believe that that implication is wrong. I believe it is wrong because he did not have the money to spend. I specifically disagree with your statement that the “governor has the most power of any elected official to control the budget agenda.” He doesn’t. The governor position in ND is one of the weakest in the nation with respect to spending. The appropriation power lies with the legislature. There’s no disputing this. Could the governer been more effective? Maybe, but that’s not what your article is about, is it? Think of it this way: if he had made this announcement earlier, what then? There was no money for him to spend back then either. Could he have been a more effective governor and done more with the legistlature? Maybe, but that’s not really what I perceive your point to be. Your implication is wrong.

  5. Jeff Nelson says:

    Your knowledge of hindsite is brilliant but your focus lacks understanding. Most folks know that it takes time to act. it’s easy to point a finger…..much harder to raise your hand and be part of the solution. guess you needed the sensation of dragging a good North Dakotan through the mud. Good luck mister….. progress takes time…. to complain takes seconds.

  6. [...] Dalrymple’s grand revelation: Oil patch needs money - Great Plains Examiner [...]

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