ND has one of the lowest 'bonded indebtedness' in the country

Jun 10, 2016

Before the oil boom brought increased tax revenue to North Dakota, the Legislature would have to issue bonds for such things as college buildings, building maintenance or special highway projects.

From 1993 to 2001, for example, the Legislature issued $51.2 million. And from 2003 through 2009, $43.7 million.

Those bonds have to be paid back.

"In the current biennium, our debt service is $13.5 million," said State Budget Director Pam Sharp.

Under a statutory formula, a limit of 10 percent of the first 1 percent of state sales tax is used to finance the debt service.

Carlene Fine of the Industrial Commission says it is one of the lowest in the country.

"What Moody's has shown is North Dakota is in the bottom three sattes in terms of bonded debt," Fine said. "We're 48th. Wyoming is 49th, and Nebraska is 50th."

Fine says there are other bonds, called “revenue bonds,” that are not the taxpayers’ obligation.

"The University System has bonds for dormitories, parking lots, that sort of thing," Fine said. "They are paid with the revenues generated by those facilities."

Another project paid for by revenue bonds is the four-laning project on Highway Two west of Minot.

"they still have about $23 million still outstanding on that debt," Fine said. "DOT is paying it off through gas tax revenues."

In a speech to the North Dakota University System, Governor Dalrymple said because of the state’s current revenue picture, the colleges should not include building projects in their budget requests. But he did leave the door open for emergencies – and said bonding could be an option.