North Dakota oil tax savings account earnings beat forecast
BISMARCK, N.D. (AP) — North Dakota’s trust fund for oil taxes is realizing hefty earnings due to a rebounding economy and better-than-expected stock investments, officials said Tuesday.
Revenue from the Legacy Fund for the two-year budget cycle that ended last month was about $872 million, up from the $736 million that budget writers and the Legislature had forecast.
“The stock market has rebounded from the initial COVID drop and it has bounced back tremendously,” state Treasurer Thomas Beadle said.
State Office of Management and Budget Director Joe Morrisette said nearly half of the extra revenue — $65 million — will be used to reimburse a constitutional fund that benefits schools but had been shortchanged in error for about a decade. Money from the Common Schools Trust Fund is distributed to North Dakota’s public schools.
Voters in 2010 endorsed a constitutional amendment that requires setting aside 30% of state tax revenues on oil and natural gas production in the Legacy Fund, which is valued at about $8.8 billion.
The most recent deposit into the fund was $45.5 million in June.
A two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund’s principal, which has not been targeted to date. However, lawmakers have not been timid about spending interest from the fund, mostly to balance the state’s budget that has swelled in the past decade.
The state’s current two-year-budget, including federal funds, is $17 billion, or about $2.1 billion more than the budget cycle that ended June 30.
The State Investment Board, which is headed by Lt. Gov. Brent Sanford, invests Legacy Fund money in a broad range of assets, including stocks, bonds and real estate.
Republican Gov. Doug Burgum this year signed legislation aimed at creating a broader investment policy for the Legacy Fund.
The legislation sets targets for 10% of the fund’s principal to be invested in equity investments in the state and 10% in fixed income investments within the state.
Backers of the Legislations said only about 1% of the Legacy Fund’s principal had been invested in North Dakota in the past.