As the North Dakota Legacy Fund continues to grow, so do the ideas for using the money. Last week, the Legislature’s Legacy Fund Earnings Committee took testimony on how to spend the earnings.
There was no shortage of worthwhile ideas pitched to the committee. The question remains, what’s the best use of the fund? When voters approved the fund in 2010 it was intended to provide a better future for North Dakotans including generations to come.
The fund has grown beyond most expectations. A share of the state’s oil and gas revenues go into the fund. It takes a two-thirds vote by both chambers of the Legislature to tap the fund’s principal.
The North Dakota Legislative Council estimates the fund will reach $27.99 billion by 2041 if all earnings are transferred to the state general fund. If the earnings are split evenly between the general fund and Legacy Fund it will be $36.72 billion. It’s estimated to be $48.33 billion if all earnings are returned to the Legacy Fund.
No matter which way we go, there will be a big pot of money. The Tribune editorial board has urged the state for some time to develop guidelines on how to use the fund. The committee was taking testimony on different ways to use the fund. Hopefully, the committee can develop some guidelines for what qualifies for funding.
The Tribune fears it may be too late. The fund has become so large that legislators may be reluctant to place limits on how it’s used. Gov. Doug Burgum’s administration developed some standards for legislation tapping into the Legacy Fund before the 2019 legislative session. The Legislature didn’t follow Burgum’s lead, and the governor had mixed luck with his legislation.
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Last week, the presidents of North Dakota State University and the University of North Dakota renewed their push for $100 million from the Legacy Fund for the next biennium to fund research.
The research would focus on economic diversification in the state and investigate technological advancements for the agriculture and energy sectors. To sweeten the pot, they suggested nonresearch institutions in the state might be able to tap into the money. The universities pitched the idea in the 2019 Legislature and it failed.
During its two days of taking testimony last week, the committee heard proposals for rebuilding roads and bridges, increasing investment in classrooms and affordable housing, paying for universal school lunches, boosting tourism efforts and more.
The testimony was interrupted by hecklers who didn’t like a presentation by the American Legislative Exchange Council. While the heckling was out of line, it reflects the passion created by the Legacy Fund.
The state needs guidelines for using the Legacy Fund that guarantee all North Dakotans benefit from how the money is spent. The Legacy Fund shouldn’t be used for pet projects when supporters aren’t able to get appropriations from the Legislature.
It won’t be easy for legislators to agree on guidelines, but it’s essential that they do. They also need to be consistent about applying them. This needs to be done by the 2021 Legislature to prevent a scattershot approach to using the Legacy Fund.
The Legacy Fund can do wonders for the state, but only if it’s handled wisely,