With oil dollars all but gone, what did we get?

For Chris Sake | July 6th, 2016

The state of North Dakota’s rainy day fund may be out of money by the end of the year. The state relied on Moody’s analysts, who have consistently projected inaccurately; most importantly, the declining price of oil.

The state’s oil boom has cooled off sufficiently. Two years ago we had 187 active oil rigs in North Dakota. A year ago that number was 78, and as of this summer, 28.

State legislators told the Forum recently that we are in the middle of a “mental health crisis,” not enough money and resources (only one psychiatrist, for example) in the rural and western part of the state. In the east, we have an opiate crisis. We are seeing the effects of it every day, with suicides and overdoses by people who sought help and didn’t get enough. It’s heartbreaking.

We can sit here and debate whether the oil boom is over. It won’t be what we had two years ago, with people at McDonald’s making $15-$20 an hour and bustling traffic and business throughout the oil patch. That era is gone.

My main question is, though, what did we get for it? Here we are, three to five years since it started, many millions of dollars collected. Where did it go and what did we do with it?

It’s almost all gone. A lot of money was allocated to much-needed infrastructure in the western part of the state: road construction, schools, projects that needed assistance.

But here we had this once-in-a-lifetime opportunity; actually the second opportunity. The state had already had one oil boom from which we should’ve learned some lessons about what not to do. Out of that came the budget stabilization fund (or rainy day fund), so we wouldn’t run out of money for all the normal state business, which happened the last time around. Except the projections have been so wrong, the downturn so bad, that we may run out this time too, and need to call a special session of the legislature.

It’s shocking that the state that was the envy of the nation during hard economic times could have its fortunes reversed so fast and be without cash.

One of the reasons a special session would be necessary if the next forecast shows the rainy day fund will be depleted, is that the Department of Human Services cannot afford another across-the-board state agency budget cut, such as the Governor ordered after the last failed budget projection. Legislators would need to be called in to decide where to cut what, in order to find the money necessary for the state to have some sort of cushion.

If things are as bad as many say they are with mental health and opiates, perhaps a special session should have been called earlier this year so that no money at all was cut from the Department of Human Services.

We need to figure out how it got this bad, why the projections were so wrong and what we did with all the money we did have. Was it spent wisely?

Also going forward, allocate the funds to the areas that need them most. It’s clear now that everyone, Republicans, Democrats, and all those in between, understand we need to devote state resources, dollars, and ideas to solving the opiate crisis. But it’s broader than that, we need to take a look at how we treat all mental health issues, and many of these are addiction-related.

No question, the dissatisfaction with state leaders and yearning for a shakeup which led to Doug Burgum’s victory in the Republican primary, was from people in all parts of the state seeing this.

It’s just that we didn’t know how bad it was. Now that we do, let’s get an assessment of what went wrong and start cleaning up the mess. Fire Moody’s ASAP and please someone tell me, what did we get for all that money the oil boom raised?

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