Skip to main content

Plunging oil prices blow a $4B hole in North Dakota's state budget

  • Author:
  • Updated:
    Original:

The plunge in oil prices has blown a $4 billion hole in North Dakota's budget in the space of just a month.

Lawmakers have accepted a revised forecast that projects the state will collect $4 billion less in oil and gas tax revenue between 2015 and 2017 compared to a forecast in December, the Fargo Forum reports.

According to the Wall Street Journal, the price of a barrel of oil dropped below $44 in same-day trading for the first time since 2009 Thursday, and these plummeting prices are taking a toll on rigs in the Bakken oil patch.

The Fargo Forum says the assumptions were based on discussions with the state tax department and oil and gas industry officials. The new forecast projects tax revenues will be down $4.05 billion in the 2015 to 2017 cycle.

The new figures reflect the lower oil prices and anticipate that a number of oil rigs will suspend operations, the Star Tribune reports.

The report assumes there will be 53 fewer oil wells in production each month, 135 compared to 188 operating last year, and total oil royalties lost, which include income taxes collected from workers, will total $4.9 billion.

Gov. Jack Dalrymple's budget plan in December was based on a price of between $74 and $82 a barrel between 2015 and 2017, the Washington Times reports. The new forecast is based on prices of between $45 and $65 a barrel.

A final revenue forecast will be presented in mid-March. That will be used to formulate the 2015-2017 state budget.

Senate Majority Leader Rich Wardner told the Washington Times the state’s economy remains healthy and oil production is forecast to remain steady despite sagging prices.

Next Up

2 (3)

Focus is on family fitness at this year’s Twin Cities Marathon

Don’t miss out on the running, racing and all the fun things to do for the whole family

Screen Shot 2022-08-18 at 2.29.47 PM

Family's tributes to mother killed by partner in St. Paul murder-suicide

The 30-year-old was killed by her partner, who then killed himself.

FatalEaganCrashSceneAug18

Eagan man killed after crashing into traffic signal

The 30-year-old crashed into a traffic light early Wednesday morning.

Melvin Carter

What's in Mayor Melvin Carter's budget proposal?

Here's what the St. Paul mayor is putting his focus on for the upcoming year.

WCCO building

Digital, streaming employees at WCCO-TV vote to unionize

The 15 employees will join on-air talent and producers as members of the SAG-AFTRA union.

unnamed-3

Police arrest man suspected of sexual assault, weapons threat in Eagan

The investigation prompted a SWAT response in an Eagan neighborhood on Tuesday.

covid

Minnesota's COVID-19 update for the week ending Tuesday, August 16

The latest reporting period averaged just under 1,300 new cases per day.

USATSI_12923669

Jason and Carly Zucker sell Edina home for $4.18M

The property was bought in 2020, months after Jason Zucker was traded to the Pittsburgh Penguins.

Legacy Lot Random (1 of 6)

Gallery: Luxury living is par for the course here

Cragun’s Golf Resort Communities Offer Stunning Views Along with Resort-Style Living

Related