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

Eddie Rosario

Report: Twins place Eddie Rosario on outright waivers

The outfielder's time with the team appears to be coming to an end.

radio station, microphone

Christian music broadcaster revealed as buyers of Go Radio

Educational Media Foundation. operates the K-Love brand, which has a presence already in the Twin Cities.

Screen Shot 2020-12-01 at 5.04.39 PM

St. Paul police chief reportedly fires officer who shot naked, unarmed man

Chief Todd Axtell said the officer's use of force was not reasonable.

Trevor May

Report: Trevor May leaving Twins to sign with Mets

The right-hander will sign a two-year deal to head to New York

Car crash

'Grim' milestone: Minnesota's traffic deaths reach 364, tying 2019 total

“With fewer vehicles on the road during the 2020 pandemic, the loss of life on Minnesota roads is beyond disappointing."

Devin Weiland

Charges: Albert Lea man, 21, fired around 90 shots at police, residents

Weiland was arrested after a standoff that lasted more than eight hours.

Body storage warehouse

Body storage warehouse 'ready if needed for COVID-19 fatality management'

The warehouse is currently storing PPE and testing supplies.

Giordano's

Signs come down at Giordano's restaurant in Uptown

It appears the restaurant has closed for good.

State Capitol.

Walz eyes COVID-19 relief package totaling $300-$600 million amid budget surplus

The state forecasted a budget surplus for the remainder of the biennium.

Bar beer

Walz non-committal on extension of restaurant, gym closures

He has suggested that the ban on mixing with people outside your household could continue over Christmas.

Related