A look into Governor Burgum's State of the State
In Grand Forks, on January 29, Governor Burgum presented his State of the State 2020 address. GNDC was the sponsor and live tweeted the event.
Starting with gratitude and a drone landing, his presentation thoroughly drilled into efforts and accomplishments of his five strategic initiatives: behavioral health and addiction, transforming education, tribal partnerships, the Main Street Initiative, and reinventing government. Burgum also highlighted efforts of the energy and agriculture industries, demonstrating the power position North Dakota is playing from.
Although the state currently has incredible momentum, he breathed a word of caution and promoted proactive approaches moving forward specific to cybersecurity, innovation, infrastructure decisions and development, and the Legacy Fund.
Burgum’s position on the Legacy Fund, although high-level, was well-timed. His 2020 plan is more pragmatic than that of the 2019 legislative budget proposal, recognizing the future need of the fund to ensure a legacy or potentially safeguard for a rainy day due to world events or market forces outside our control.
Burgum’s approach of “spend some, reinvest some” is sound. The “legacy” of the Legacy Fund is that someday the earnings derived from the principle will need to replace the $4.8 billion of oil tax revenue that North Dakota is dependent upon to fund the state. Burgum highlighted a graph showing that if half of the Legacy Fund earnings are reinvested and the current deposits remain steady, by 2033 the fund would surge beyond $26 billion. Currently, the fund is at $6.8 billion.
Projections show that Legacy Fund earnings to be approximately $400 million this year. This begs the question, what to do with the remainder of the earnings? Burgum revealed his Legacy Fund framework with focus areas: smart Infrastructure, property tax relief, and transformational legacy projects. Burgum and his team, over the next 10 months, are developing a 10-year infrastructure plan. With the successful passage of Operation Prairie Dog providing needed funds for counties, cities, townships and airports, the focus shifts to addressing state infrastructure needs. Burgum spoke on buildout of the state unmanned aircraft network, broadband despite location, four-lane expansion of road networks, and smart growth of our cities and towns.
These ideas will need to be weighed against the other numerous ideas being circulated by elected officials and the general public. The Legacy Fund Earning Committee, chaired by Representative Pollert, will be meeting in Watford City on February 19-20 for their second public opinion forum on Legacy Fund earnings. The first one was held in Fargo, in November. GNDC will be present to track progress of the Committee and Legacy Fund spending proposals. The Legacy Fund will continue to generate opinions and ideas specific to the principal and earnings as we near the 2021 Legislative session.