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Land board led by Burgum believes school funds were shorted

March 11, 2019

BISMARCK, N.D. (AP) — North Dakota’s Land Board led by Republican Gov. Doug Burgum said Monday that $137 million has not been properly deposited in two constitutional funds that benefit schools over the past decade and should be reimbursed.

The board directed Land Commissioner Jodi Smith to testify before a Senate committee Wednesday that the money should be made up to the common schools trust fund and the foundation aid stabilization fund.

Smith believes the state’s share of revenue from the oil-rich Fort Berthold reservation should have gone in the funds.

Burgum said North Dakota is on solid financial footing and it would not greatly affect the state’s budget to refill the funds “retroactively.” Burgum also said the money could be repaid over time.

Smith manages the state Land Department, which leases rights for grazing and rights to produce oil, coal and gravel from state lands. The Land Department manages several state trust funds, including the common schools trust fund that benefits public schools.

The state Board of University and School Lands oversees the Land Department. Burgum is chairman of the board that also includes the state treasurer and Attorney General Wayne Stenehjem, Secretary of State Al Jaeger, Attorney General Wayne Stenehjem, School Superintendent Kirsten Baesler and state Treasurer Kelly Schmidt.

GOP leaders believe the money was correctly distributed by Schmidt, based on guidance from the attorney general’s office in 2012, but they have introduced legislation that would begin steering some oil tax money into school funds for now on. However, their bill is not retroactive.

Republican lawmakers contend North Dakota’s schools were not shorted money in the past, and blamed any problems with “ambiguous” language in the law.

Schmidt was the sole dissenting vote on pursuing the money retroactively on Monday. She told fellow land board members that a bill that pursues a retroactive solution runs the risk of failing, and the state “would be right back where we are today.”

A hearing on the legislation is scheduled Wednesday.

Stenehjem said it’s clear in North Dakota’s constitution that the funds should be deposited in the funds.

“I don’t think we can fulfill our constitutional responsibility without looking back,” he said.

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