Things are a bit lopsided in North Dakota when it comes to collecting tax revenues from the state’s explosive oil boom.
The state government — headquartered of course, in the city of Bismarck — collects a full 89 per cent, while local communities take the paltry remains.
Here’s the table from Montana-based Harvest Economics, with three other states’ breakdowns shown for comparison:
Photo: Harvest Economics
As a result, some cities at the heart of the state’s oil boom are in danger of going bankrupt, according to Bloomberg’s Jennifer Oldham.
The situation is compounded by the distribution formula the state uses to send money back to counties where the drilling takes place, Harvest’s Mark Haggerty told us by email.
While ground-zero areas where the drilling actually occurs have fared better, cities and counties that ring those areas — and often bear most of the costs — get practically nothing.
“We call this issue ‘jurisdictional unevenness’ but in English it just means that revenue goes to the place of production, not necessarily to the place of impact,” he says.
The only silver lining may be that the oil boom has been so huge the state ties with Wyoming for most revenue generated from a given Bakken-type well: $1.5 million in the first 35 months, according to Harvest’s report.
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