A recent study by a financial consulting group shows North Dakota ranking third in the nation for its “rainy day” government funds.
The study was done by SmartAsset.
Many of the funds date back to the “bucket bill,” passed in the 2011 Legislature. Dubbed "The Bucket Bill," it put oil tax collections into various “buckets,” setting up how oil revenues would flow.
"We could see the coming harvest of the oil, as things were taking off in the Bakken," said former North Dakota House Majority Leader Al Carlson (R-Fargo). "We figured that, in order to properly use those funds that we were collecting on that tax, we should have some designated areas where the money should go."
The plan was worked out in a conference committee for HB 1451. Carlson was on that conference committee.
"We were concerned that if the money rolled directly into the General Fund, it would be gobbled up in expensive and expanded government spending."
One of the “buckets” went toward a K-12 education “stabilization fund.” There was also a “strategic infrastructure investment fund,” and a “budget stabilization fund.”
Carlson says that budget stabilization fund was virtually drained in the 2017 Legislative session, as lawmakers dealt with a downturn in the oil industry.
"Every nickel of that was used to preserve the most important programs we had set up," Carlson said.
That fund has been replenished since.
The K-12 stabilization fund prevented local school aid from being cut. In 1982, during a time when oil prices fell to around $5 a barrel, then-Gov. Allen Olson (R) was forced to use his allotment authority to reduce spending across the board, including K-12. Now, to access those rainy day funds, a Governor must use the allotment power, and that opens the rainy day funds to replace some of the money that had been reduced. That was used by Gov. Jack Dalrymple (R) in 2016.
