Blog Post #6
Republican Roller Coaster Ride
 
For at least the past three sessions, the Republican-controlled legislature has cut income and corporate tax rates. This was done to please the public who noticed that rapidly increasing oil revenues made it appear the state was awash in money.

To reduce the surplus in the General Fund, the Legislature could have (a) put some of it in the Legacy Fund; or (b) sent every North Dakotan a one-time check; or (c) spent some of it on economic development or programs that worked to keep people out of prison or off welfare; or (d) simply saved some of it for a rainy day.

But instead, the Republicans did absolutely the worst thing: they permanently lowered the tax rates on personal and corporate income. I say permanent because I don't believe they would ever have the courage to raise rates should revenues ever fall short. (In addition, most of the corporate rate cuts went to out of state corporations; most of the personal tax cut dollars went to higher income people.)

The Republicans made themselves look good by these cuts--as well as state subsidies to local property taxes--which they paid for with volatile oil revenues. I warned them then that basing permanent reductions on temporary income was irresponsible. 

Now that oil prices are plummeting, and with them state revenues, Republican candidates (as well as editorial writers) are calling for deep spending cuts to make up the budget shortfall. And of course they're blaming oil prices--which were out of their control--for the state's fiscal crisis rather than their own lack of foresight and wrong choices--which were within their control.

What a roller coaster ride they've taken us on.