Two years of low oil prices may force the North Dakota legislature to reduce the state’s revenue forecast and projected oil prices for the next two years.
According to the Bismark Tribune, the Appropriations Committees in both chambers will vote on a budget plan this week that will lower the state’s oil price, oil sales and tax income forecasts for the next two years.
The state’s oil production projections will remain unchanged under the plan.
A budget plan proposed by former North Dakota governor Jack Dalrymple for the 2017 to 2019 period projected North Dakota crude prices to sit between $51 and $53 per barrel.
The newest plan forecasts crude prices to stay at $48 per barrel for the two year period with production staying at 900,000 barrels per day, the Bismark Tribune said.
According to the Grand Forks Herald, the new budget sees general fund revenue dropping to about $3.7 billion for the 2017 to 2019 period, a 34 percent decline from the previous two year period.
Despite falling revenue, North Dakota is still expected to have just over $5 billion in surplus cash when the fiscal year begins on June 30, according to the AP.
The legislature’s plan also eliminates a proposal to boost taxes on oil and gas production and oil extraction that would have increased the state’s cap on those taxes to $1 billion from the current $300 million cap, the Bismark Tribune said.
The proposed budget plan also sees sales tax collections falling by more than $100 million to $1.79 billion for the two year period with income tax revenues declining by over $19 million to $693 million, the Bismark Tribune said.
State Rep. Mike Nathe told KFYRTV that the reductions to the revenue projections were necessary because the “revenue picture that we have seen ourselves in today things are kind of fluid and moving.”
Legislators are expected to vote on the proposed budget plan on Thursday.