Think critically about price of oil
It might be tempting to agree with The Forum when it proclaims the benefits to North Dakota from falling gas prices (editorial, Nov. 25), but it would be wise to do some easy analysis on how low prices hurt those outside the industry.
First, remember that oil and gas production and extraction taxes accounted for more than 50 percent of the state’s revenue in 2014. That doesn’t count income or sales taxes on equipment purchases and the industry’s average of income of over $100,000, not forgetting how those dollars turn within our local economies.
Then consider that the average family will spend $1,962 on gasoline this year, a fall of $550 over last year.
Now, think of that family owning a single-family home in Fargo worth $207,215 (the median value reported by the GFMEDC). That family saved $364 on property tax reductions approved by the state in 2015 alone. When including ongoing reductions and funding mechanisms from the 2013 session, that figure about triples to $1,000 or more annually.
Finally, consider the money this family will save when its children head to college from the hundreds of millions of dollars the state has poured into higher education.
There’s more we can consider, such as how the oil and gas sector drove job creation across the state, provided almost all the nation’s growth after 2008, and how a reduction in capital expenditures in this single industry has reduced global growth, but the conclusion remains the same: The oil and gas industry has let North Dakota lower taxes and invest in itself.
The price of oil matters to the average North Dakotan and no one should celebrate the fall.