Any state that relies heavily on oil and gas gross production taxes for state revenue has felt the impact of the drop in oil prices over the past two years. Oklahoma has. So has Texas.
And North Dakota finds fuel tax collections for the State’s Transportation Department are taking a hit with fewer vehicles on the road because of the state’s economic slowdown.
“Traffic generates revenue,” Transportation Director Grant Levi told the Legislature’s Interim Transportation Committee according to a report by the Associated Press.
North Dakota has a 23-cents-a-gallon tax on motor fuel and the latest data show the average daily traffic count for the state in June was 480,000 vehicles, a drop of nearly 20,000 from June of 2014.
But the state’s economic slowdown is mostly due to the slumping oil prices and fewer rigs drilling for oil and gas. The drop in the state’s rig activity forced the State Transportation Department to make up for a more than $69 million projected shortfall in fuel tax collections. The department did not fill nearly 20 positions and closing five of North Dakota’s 28 rest areas.