BISMARCK - A North Dakota lawmaker warned the state's $5.5 billion Legacy Fund could be targeted through the initiated measure process and called for setting a "precedent" for the growing pot of money Thursday, Aug. 16.
Republican state Sen. David Hogue of Minot backs an idea to use a slice of the Legacy Fund, including its principal, for a loan program to help finance local infrastructure projects. He said it has become "incredibly easy" for groups to amend the state's constitution, including with out-of-state money, making the fund vulnerable.
"If we think we're going to sit on this like a nest egg until 2025 ... we're being very naive," he said during a bipartisan panel discussion at the annual Greater North Dakota Chamber Policy Summit in Bismarck. "I see the Legacy Fund as a huge target."
State Treasurer Kelly Schmidt, a fellow Republican, urged caution and opposed using the fund's principal, which exceeded $4.8 billion at the end of May. Hogue countered that state officials already invest the principal.
"We are at a defining moment in our state," Schmidt told a crowd of policymakers and industry officials at a Bismarck convention hall. "I think it's so very important that we just stop, we take a deep breath and really define what is the role of government, what is the role of the Legacy Fund and we use that as the absolute last resort."
Voters agreed to set aside 30 percent of oil and gas tax revenue for the Legacy Fund in 2010 as the oil boom surged in western North Dakota, and it was worth $5.5 billion at the end of May. It could reach $25.4 billion by mid-2031 if it's left untouched, according to projections from Schmidt's office.
The constitutional language didn't outline specific purposes for the money, however. Discussions about using the Legacy Fund have heated up in recent months as the Legislature inches closer to the start of the 2019 session in January.
The state constitution prevented lawmakers from spending the fund's principal and earnings until after June 30, 2017, and tapping the principal requires a two-thirds vote of the Legislature. They budgeted $200 million in earnings to balance the state's books this two-year budget cycle.
Lawmakers have floated the possibility of using the Legacy Fund for physical infrastructure such as flood control and water supply projects. But Democratic state Sen. Tim Mathern of Fargo argued Thursday that workforce shortages, as well as mental health and opioid addiction crises, are limiting the state's economy.
"I think we need to address some of those, consider those infrastructure needs," he said.