Comparing N.D., Alaska
David Listoe, North Pole, Alaska
Few people have been given the gift of seeing into the future. I am one of this select group. Here, in this letter, I will show you what the condition of North Dakota will be in 36 years. No one has listened to me before, but I hope this time is the charm. I have fond memories of North Dakota.
I grew up on a farm outside Bottineau, and, although I didn’t pay much attention to politics or the economy, I felt confident our legislators were responsible and would keep the state running smoothly. After I left home, I sometimes hears positive references to N.D. legislators and policies, and I felt reassured the state was being well run.
Now, unfortunately, as I look into your future, I see a different crowd heading toward Bismarck. Legislators in the past were chosen because they were financially conservative. Today they are honored for spending money.
Every town will have a new library, a swimming pool, a skating rink, an assisted living complex, a new school, a new hospital. This list, you will find, is endless and though well-intentioned, comes with a price tag of staffing and maintenance.
Every town and government agency will also hire many more people. The dangerous aspect concerning these state and city workers is that they will demand and eventually get a Cadillac pension and health care plan which will grow every year.
A smaller issue, but one that shows the new attitude in Bismarck, will be the number of studies done on a wide range of subjects. Studies that are paid for with hundreds of millions of dollars but are seldom implemented.
I see the future clearly. Thirty-six years after the first oil well was fracked, oil production will be slowing down. The costs to run the now greatly increased capitol staff, to pay thousands of retirees their Cadillac retirement, and to maintain all the newly built infrastructure will finally equal the oil money coming in. Congressmen will look around and say two things. The first is: “What are we going to do? Let’s reinstate the income tax.”
They will then compute the amount every resident including babies and grandmothers will have to pay. The first year will be $1,000 per person. Year 10 will be $17,000. The plan is scrapped because most residents vote, leading us to the second statement from Capitol Hill.
“Dear Lord, help us. Send us another boom. We won’t waste another one.”
You may question my ability to see the future in such detail and doubt my accuracy. Since I wish North Dakota well, I will explain my insight.
For the past 36 years I have lived in the Fairbanks-North Pole area in interior Alaska. Oil began flowing from Prudhoe Bay to Valdez in June 1977. We have seen an ocean of oil money flow through the state for these 36 years. We are now at the balancing point. This year or next year will be deficit financing. The oil money is drying up with no new field ready to come on line and no other new sources of income having been developed.
One hundred-fifty oil producing areas around the world were compared for the attractiveness of their oil production environment. Alaska ranked 147th because of “general risk of long-term uncertainty.” After 36 years of ever growing bureaucracy, “Alaska is a more complicated environment for just about anything, including oil taxes, permitting, environmental regulations and infrastructure limitations,” according to a Fairbanks newspaper. Russia, which nationalized her oil and gas industry a few years ago, is more attractive than Alaska.
Residents of North Dakota beware. In 36 years, you will be where we are today. Unless new oil comes from somewhere, in six or seven years our oil pipeline will have too few barrels in it to pump and it will be shut down. Ninety percent of our budget is paid for by oil. We have developed no new sources of income and our expenses are bloated from easy money. You do not want to follow our example.
Perhaps you may try to elect responsible legislators. While that is essential, they will not prepare North Dakota for the years after oil. They are elected to serve your interests, and, unfortunately, your interests will be short-termed and self-centered.
I was told a story by a crane operator. He said the operators union hired an outside accounting firm to audit their books every year. It is very difficult to get into this union now because it is prosperous and well run. North Dakota could remain prosperous if you choose.
The most important sentence in this letter is: You, the voting residents of North Dakota, are both the problem and the solution. If you choose, you can assure North Dakota prospers. If you choose, you can assure North Dakota goes bankrupt.
One simple action you can take is to set up a permanent fund like ours to soften the transition from oil to non-oil. We remove money every year to pay taxes and give to every resident. This is a waste and feeds the problem of too much spending. Your fund should be iron clad to protect it from both the voters and the politicians. Either group will drain it dry if left unchecked, leaving you with nothing but debt.
Writing this letter has left me depressed, so I will end it with some good advice. When the 36 years are drawing to an end, start praying for rain, bumper crops and good prices. That’s all you will have left.