North Dakota counties share $4M in oil tax grants; most goes to roads torn up by truck traffic

By James Macpherson, AP
Tuesday, July 6, 2010

North Dakota counties share $4M in oil tax grants

BISMARCK, N.D. — Jeff Engleson, the sole person responsible for North Dakota’s oil tax grants, said he logged nearly 5,000 miles in five weeks this spring driving rural roads to decide how he’d distribute the money.

In the end, he approved 290 requests totaling $4 million in 17 counties. Two-thirds of the money will be used to fix roads torn up by heavy truck traffic.

“Spring is when you get to see the roads at their worst,” said Engleson, the director of the state Land Department’s Energy Development Impact Office.

Nearly 380 government entities submitted requests totaling $31.9 million this year after the Legislature raised the cap from $6 million to $8 million during the 2009-2011 budget cycle. The money comes from the state’s 5 percent oil and gas production tax and is meant to help counties affected by growth in the state’s oil industry and related development.

The $4 million is the most awarded in a single year since 1983, when the state gave out $5.1 million.

The final grant requests were approved Friday, and counties should begin receiving money this month, Engleson said.

Mountrail County, the busiest area of the state’s oil patch, got more than $1 million, the most awarded to a county this year.

County auditor Joan Hollekim said the money wouldn’t do too much to improve roads hammered by heavy truck traffic.

“It’ll help out, but it’s not going to take care of the problem,” Hollekim said. “Every little bit helps, but a lot would help much better.”

While most of the money will be spent on roads and bridges beaten up by oil traffic, some will go to fire departments and ambulance services in oil-producing counties.

Engleson also approved requests to replace a dozen school buses wrecked by poor roads in western North Dakota.

Two grade schools in Dickinson will share about $25,000 to expand classrooms, Engleson said. Young families drawn to the area by economic development resulting from the oil boom have boosted school enrollment in the city, he said.

“There are 166 new kids at the two grade schools, and they’re having to add on to their classrooms,” Engleson said. “Clearly, the number of young people has jumped in the city.”

Until 2007, the grants were capped at $5 million per two-year budget cycle. Engleson said not all the money was spent in lean oil-producing years of the 1980s and 1990s. Last year, more than 250 local government agencies in 15 western North Dakota counties shared about $2.8 million to deal with the impact of energy development.

The program has provided more than $64 million since it started in 1982, Engleson said.

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