On February 19, GNDC attended the second public comment session of the Legacy Fund Earning Committee in Watford City. The full room and extended agenda (lasting past 10:00 PM) was a testament to the importance of the Legacy Fund to North Dakota. The Fund, created in 2009 through legislative action with voter approval in 2010, is a sound concept when considering the state’s dependence on oil tax revenue to balance the state’s budget. The Fund will go beyond the finite resource of oil to leave a "legacy" for the state. However, what that legacy can be is what this interim committee is examining. They have started their process with garnering ideas from citizens.
As oil continues to be extracted, tax revenue will continue to be deposited into the fund. On average over $55 million is being deposited monthly into the Fund with a balance of over $6.8 billion. Of those providing testimony at both the Fargo session and recently the Watford City session, there was a perceived consensus to not dip into the principal but to focus on the earnings. The key themes for the evening ensured the fund continues to grow for the future while utilizing earnings for proposals. One speaker reminded the group that only thirty percent of the oil tax is being deposited into the Legacy Fund. This leaves 70%, the lion’s share, to fund projects similar to many of the proposals that were being suggested at the public hearings.
The major focus of the presented proposals utilized dollars for infrastructure investment specifically tourism attractions, schools, and road and bridge maintenance and enhancements. Transportation infrastructure proposals focused on traffic and safety concerns. Whether it was traffic volume on gravel roads or the impact of converting Highway 85, a major arterial highway, to four lanes – this focus would benefit the region as these roadways provide access for both citizens and the oil industry. But outside of these comments, investing in public school systems was by-far the most consistent ask for the evening. McKenzie, Williston, Williams, Dickinson and Mountrail school districts made arguments for how available interest earnings should be used for brick and mortar construction due to overcrowding. School districts can issue bonds, if approved by the voters, to fund school construction. However recently in some of these districts and others, bond issues have failed by slim margins prohibiting capital projects. Currently, the state provides schools funding from the Common Schools Trust Fund, which already receives 10% of oil taxes.
Similar to the forum in Fargo, there are numerous perceived needs. For citizens of Western North Dakota, their top priority is school funding sources. The Legacy Fund Earnings Committee and the Legislature have their work cut out for them. The Greater North Dakota Chamber continues to develop our stance on the potential of the Legacy Fund and is seeking opinions from our members. Our main policy committee, made up of industry representatives from our membership, is taking a close look at Legacy Fund policy. Please e-mail our Director of Government Affairs, Matt Gardner, with any thoughts on the legacy of North Dakota.