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Bakken.com CEO presses North Dakota Governor on 630POV

By | Bakken.com

Tuesday night on 6:30 Point of View on KX4, we continued our “Where is the Money?” series with North Dakota governor Jack Dalrymple joining host Chris Berg and CEO of Bakken.com Mike Marcil to discuss the possibility of making North Dakota the first zero-tax state in the nation.

Berg opened the show by asking viewers if they would want a check for three thousand dollars each year for the next five years, inspiring a flood of “Yes” comments from viewers via text and voicemails.

North Dakota governor Jack Dalrymple replied that, while a zero-tax state is a wonderful thought, taxes are actually tied up with other financial obligations — like savings and trust funds  – according to constitutional provisions.

Below are some excerpts of the conversation that occurred on Tuesday’s show. You can watch the discussion in its entirety by clicking the video above.

Click the link on the side to see the first episode in our “Where is the Money?” series.

Mike Marcil, Bakken.com CEO:  ”We finished a six month research project on all of the constitutional fund and everything from the postage funds to the legacy funds. One of the things that we found is that in the minerals side of basically the lands department, there is active income that has nothing to do with the oil — the production and exercise taxes, it has to do with the royalties that are received by the lands department. Can you speak to that? Because that would appear to be over $700 million last year in active income that conceivably, if we extrapolate, can go for 30 years or 40 years. Can we replace the property tax buy down out of the general budget with a constitutional vote to the people to say, hey, let’s replace it with the trust fund revenue?”

North Dakota governor Jack Dalrymple: “Well, those are fun things to think about. I think that the common schools trust fund is controlled by our constitution and they are required to accumulate, you know, that wealth, those assets, in a permanent trust fund. And then we basically spend a percentage of it every year. That fund could grow extremely large. The income that could come off of that fund to be distributed every year could become very substantial. It is dedicated to the support of our K-12 schools. But even if we use it for that purpose, that reduces the pressure on the general fund. And that saves us money and that ultimately leads to a situation as you described where we could say, hey, maybe we don’t need all the general fund revenue that we’ve been raising.

Marcil: It is a fairly large number already. Last year it was almost $1 billion just in the revenue in the common schools trust fund, not the entire lands department. But the question would be is do you think the voters would vote for some restructuring of the way that those dollars — and I’m not talking about the investment dollars, I’m actually talking about the active income, just like the bank of North Dakota and how we generate an income stream that could be used for bonding or could be used for one-time school purchases for, frankly, repeal the existing property tax formula to the general budget and replace it with a trust fund which, as you know, has nothing to do with property income or any other tax. They have already — these are moneys that are coming and have already been taxed.

Governor: “Yeah. What you are bringing up is topics that haven’t been discussed, you know, that much in North Dakota yet. But it was interesting this summer I had an opportunity to go to Norway on a trade mission and we had an opportunity to meet with some of the leaders of Norway, some of their business leaders, as well, and they talked about, you know, after 20 years of north sea oil income, the country of Norway is actually contemplating the possibility of running their country basically on interest. And that’s an amazing thought. It has a lot of implications. The Norwegians said they aren’t all positive. There’s a danger of people becoming a bit lazy. So that’s down the road a ways for North Dakota. I think we are just beginning to build up these reserve funds. But the day will probably come and we will talk seriously about those topics.”

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