North Dakota is no California, and Sen. David Hogue wants to keep it that way.
Hogue, R-Minot, told the House Judiciary Committee on Wednesday that initiated measures drove California’s debt to more than $335 billion.
After proposals in recent years for initiated measures that could have cost North Dakota millions of dollars, Hogue decided to try make sure the state doesn’t go the way of California.
His effort became Senate Concurrent Resolution 4006, a proposed constitutional amendment that would give the Legislature the last word on initiated measures that cost more than $50 million.
Under the measure, at least 40 percent of legislators would have to approve an initiated measure when the fiscal impact exceeds $50 million.
After approval of a measure, a three-member committee consisting of the chairman of legislative management, the director of the Office of Management and Budget, and the tax commissioner would have 30 days to determine the cost of the measure.
If it is more than the $50 million threshold, it would be referred to the Legislature, which in the first 30 days of the next session would decide the fate of the measure.
“You cannot make good spending decisions at the ballot box,” Hogue said, using the experience of California to support his point.
“California was once the most prosperous state in the nation,” Hogue said, “and they had the budget surpluses we enjoy today.”
But a series of costly initiated measures proposed by special interest groups turned that around, he said.
Today, Hogue said, many California convenience stores won’t accept state-issued credit cards because of the state’s huge debt. Left unchecked, that could happen in North Dakota, he said.
Recent initiatives to eliminate the state’s property tax and to create a $100 million heritage fund are examples of what could happen.
The property tax measure, which Hogue said would have cost the state $1.8 billion, was defeated by voters, and the heritage fund measure never made it to the ballot.
But Hogue argued, “As long as we have prosperity and a surplus, special interest groups will continue to come forward with ideas of how to spend money.”
He said it’s logical that special interest groups would be willing to spend a small amount of money to access a potentially large pot of gold.
There was no testimony in opposition to the measure, though committee members raised some questions.
Rep. Lois Delmore, D-Grand Forks, suggested citizens might view the measure as the Legislature micro-managing the initiated measure process.
Rep. Kim Koppelman, R-West Fargo, questioned whether it should include some restriction on the type of issues that could be added to the constitution.
“There are a lot of things in the constitution that probably don’t belong there,” he said.
“The constitution is like the skeleton, and the century code is the meat on the bones,” he said.
Rep. William Kretschmar, R-Venturia, said the Legislature already has oversight over initiated measures as long as it can muster a two-thirds vote to change the decision of voters.
The Judiciary Committee did not take a vote on Hogue’s proposal, which earlier passed the full Senate by a vote of 28-19.
Foundation Aid Stabilization Fund
Hogue also presented the committee with information on another proposed constitutional amendment.
He said Senate Concurrent Resolution 4010 would limit contributions into the Foundation Aid Stabilization Fund.
A 1980 constitutional amendment designated a portion of oil extraction tax proceeds to the fund, which has grown to $606 million.
Hogue said the fund can only be used for schools, and only when the governor makes across-the-board spending cuts to deal with severe budget shortfalls.
“It’s a stranded investment,” Hogue said.
The proposed amendment would cap the amount going into the fund, and would allow the Legislature some discretion in spending from it.
The only opposition came from Bev Nielson of the North Dakota Council of Educational Leaders, who asked that the bill be amended so that the fund can only be used for educational purposes.