Tougher for lawmakers to tap oil savings under resolution
BISMARCK, N.D. (AP) — North Dakota voters may get to decide if it should be tougher for the Legislature to tap earnings from the state’s oil tax savings account.
Democratic Rep. Corey Mock, of Grand Forks, told the Senate Finance and Taxation Committee on Monday that he thinks voters should decide if earnings from the Legacy Fund should be “retained and reinvested” instead of automatically going into the state’s general fund for lawmakers to spend.
Mock is the primary sponsor of a bipartisan resolution that would require a two-thirds vote of the House and Senate to spend earnings from the constitution-mandated Legacy Fund, which voters enacted in 2010.
“The default position is for earnings to be reinvested unless the Legislature initiates a transfer,” said Mock, who called the move “a critical shut-off valve.”
The resolution needs only approval from both chambers of the Legislature before going to voters in 2020. It has broad support from top legislative leaders, including the majority and minority leaders in the Senate. It passed the House earlier this month. The Senate committee is expected to take action on the resolution later this week.
The state is required to put 30 percent of its tax revenue from oil and natural gas production into the Legacy Fund.
The constitutional amendment barred the Legislature from spending any of the fund’s assets until June 2017. Currently, a two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund’s principal. Lawmakers may not withdraw more than 15 percent of the principal every two years.
Earnings from the fund are now put into the general fund, which is spent on an assortment of programs and projects.
The fund now holds about $6 billion and has grown faster than predicted with increased oil activity in the state. Earnings from the fund increasingly have been targeted for spending, including in 2017 when $200 million of the fund’s earnings was used to balance the state’s budget.
Lawmakers are reviewing several proposals to spend the interest this session, including a plan by GOP Gov. Doug Burgum to use $300 million for education loans and grants, and projects that include a $50 million Theodore Roosevelt Presidential Library in western North Dakota.
Burgum spokesman Mike Nowatzki said the first-term governor would not comment on the resolution.
The Legislature has attempted to protect the fund’s earnings before, but through legislation that needed the blessing of the governor.
In 2015, then-Gov. Jack Dalrymple, a Republican, vetoed the bill that would have barred him or any future governor from budgeting money from the fund. It also would have required the fund’s earnings to be invested back into the fund’s principal.
Dalrymple said at the time that doing so “would clearly contradict the will of voters.”