With oil tax collections down, plus a weakness in the agriculture economy, some North Dakota lawmakers are looking at dipping into various budget trust funds – and the state’s Legacy Fund – to help address any shortfalls.
But one candidate for Governor says he would like to see the disparities in spending addressed through budget cuts alone.
"We should go back to the budget of 2011-2013," said Rep. Rick Becker (R-Bismarck). "Everyone was fine. Nobody was dying in the streets for lack of infrastructure and government services. If we go back to that level of spending, we will absolutely be fine. That's my preference."
In the 2011-2013 biennium, the actual general fund expenditures were $4.4 billion. In 2015-2017, the Legislature has approved spending $6 billion.
Under current state law, the Governor would have to do a 2 ½ percent allocation before dipping into the budget stabilization fund. And the 2017 Legislature could start spending the interest earned on the Legacy Fund. But Becker has another idea for the Legacy Fund.
"I would love to see the Legacy Fund being used to bond out projects<' said Becker. "If we have future infrastructure needs, rather than huge one-time spending, why not bond it out. And instead of borrowing money from an outside entity, we can bond it through the Legacy Fund. Let's pay ourselves the interest."
Bonding was briefly discussed during the 2015 Legislature. But some Legislative leaders were reluctant to use bonding.
Becker has another idea for the Legacy Fund. He would use it for pension reform. Becker says he would prefer to see the retirement plans for state employees and teachers be converted from “defined benefit” plans to “defined contribution” plans.
"The way it is now, it is a burden that is put off on a future generation," said Becker. "It's a future liability. No one can argue that."
Becker says that's never a good idea.
"What that is, is providing largesse, and getting a pat on the back yourself, while giving the responsibility to your successors," Becker said. "That's not true responsible government."
Becker is suggesting providing other forms of compensation – or perhaps “buy downs” – for those employees currently on the “defined benefit” plan. And that would require some cash.
"That would be a fantastic use of the Legacy Fund," said Becker. "If we can take the liability from our kids, from the next generation, away from things we are giving out now, I can't think of a better way to use the Legacy Fund."
Previous attempts to change that retirement system have been rejected by state lawmakers.
