Legacy Fund

A Minot REpublican state senator is skeptical about the new GOP leadership infrastructure plan.

That plan – rolled out last week – creates three new “buckets” -- $115 million for cities, $115 million for counties and townships, and $50 million for airports. The money would come from oil tax collections.

"What was rolled out was sort of a 'Here's some money for you -- you're not asking for it or applying for it, we're just going to give it to you,'" said sen. David Hogue (R-Minot). "I have a hard time with that."

North Dakota's Senate Majority Leader likes the idea of using the Legacy Fund for low interest loans to cities and counties for infrastructure.

Two Minot lawmakers -- State Representative Roscoe Streyle (R) and State Senator David Hogue (R) have drafted a bill for the 2019 session to allow that. And Fargo Mayor Tim Mahoney had suggested the idea as a source for capital to build the Red River Valley Water Supply Project – to bring Missouri River water to the Valley during droughts.

Dave Thompson / Prairie Public

Work is continuing on plans for the Red River Valley Water Supply Project.

That project will bring Missouri River Water to the Red River Valley and other areas of Central and Eastern North Dakota in times of drought.

It has a more than $1 billion price tag. And Fargo Mayor Tim Mahoney said that price tag can be a bit scary – especially for smaller communities along the route.

"Everyone wants to have drought protection in our state," Mahoney said in an interview. "But it's an investment."

ND Legislature

Senate Majority Leader Rich Wardner (R-Dickinson) said he agrees with Gov. Doug Burgum that there could be other uses for the earnings from the state’s Legacy fund.

But Wardner said that will likely have to happen down-the road, and not immediately.

In his "State of the State" address, Burgum said he wants to see the earnings from the now $4.1 billion Legacy Fund to go toward innovations in government.

The 2017 Legislature used the earnings from the fund to help balance the budget. Wardner said the 2019 Legislature will probably need to use those4 funds again.

Dave Thompson / Prairie Public

To help balance the budget, the 2017 Legislature had to access the budget stabilization fund – the so-called “rainy day” fund.

The fund had $575 million in it – when the fiscal year began last July. Now, as of April 30th, it has just over $6 million.

"It served its purpose," said the state's Chief Investment Officer, Dave Hunter. He said the fund will rebuild.

"It's always great to have more rainy day funds than not," Hunter said. "We have come through a pretty tough time. But we look forward to building it."

North Dakota Legislative leaders agree – lawmakers need to leave the principle of the Legacy Fund alone – for now.

Beginning in 2017, the Legislature can start spending from the fund – but only with a two thirds vote of both houses. And only 15 percent of the fund can be accessed at any one time.

"This is a generational fund," said House Majority Leader Al Carlson (R-Fargo). "This isn't meant for you and I. This is meant for our kids and our grandkids."

Carlson says there are other trust funds that could be used.

'Legacy Foundation' bill defeated

Feb 24, 2015

The state Senate has rejected a bill to set up a “Legacy Foundation.”

That group would have looked at potential uses for the Legacy Fund – which was set up by voters to save some oil tax collections for future use. Interest on the fund can be accessed starting in 2017.

"When I talk to people, the two things I get asked about are property taxes and the Legacy fund -- often in the same sentence," said Sen. Kelly Armstrong (R-Dickinson). "The Legacy fund triggers heartstrings and interest, as much as property taxes."

Dave Thompson / Prairie Public

North Dakota has been putting 30 percent of its oil tax collections into a permanent “Legacy Fund.”

It was set up by voters in 2010, and it now has more than $2.2 billion. The Legislature can start tapping into the interest generated by the fund in 2017. And a group that’s been studying the fund has some recommendations on what to do with the money.

Legacy Fund to potentially make more money

Apr 29, 2013

The State Investment Board has approved a plan proposed by the Legacy Fund Advisory Board to change how the Fund is invested.

The Legacy Fund was created by voters to save a portion of oil tax revenues for future use. The fund has $1.1  billion – and that amount is growing.

Currently, the funds are conservatively invested. And it doesn’t earn a lot.

How Norway saves oil tax revenues

Jun 18, 2012

North Dakota is setting aside some of its oil tax collections into a fund for the future.

It’s called the “Legacy fund.” Thirty percent of oil tax collections go into that fund. It cannot be touched until 2017, when interest income on the fund could be spent by two-thirds vote of each hose of the North Dakota Legislature.

The country of Norway has a fund for the future as well. As Prairie Public’s Dave Thompson reports, the Norwegian fund is set up differently.