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Resources for recovery considered

As Minnesota mulls a special legislative session in the aftermath of the Interstate 35W bridge collapse and later flooding in the state's southeastern corner, North Dakota officials say it's too early to start talking about calling a special sess...

As Minnesota mulls a special legislative session in the aftermath of the Interstate 35W bridge collapse and later flooding in the state's southeastern corner, North Dakota officials say it's too early to start talking about calling a special session in Bismarck to address the Northwood tornado disaster.

North Dakota is enjoying huge budget surpluses, but the Legislature would have to meet in special session to appropriate any of the money for Northwood's recovery.

A spokesman for Gov. John Hoeven said the state awaits a damage assessment from the Federal Emergency Management Agency, and a request for a presidential disaster declaration could come today.

"Before we even talk about a special session, we've got to talk about all those things and match up the needs to what resources are available," spokesman Don Larson said.

The state has $200 million in its rainy day budget fund and $143 million in an oil tax trust fund. And, while final numbers aren't available yet, Budget Director Pam Sharp said she expects a general fund surplus of about $300 million for the two-year period that ended June 30.


"So, yeah, there is plenty of money out there, but nothing that's available without legislative appropriation," Sharp said.

One positive note, Larson said, is that about 90 percent of Northwood residents have property insurance.

House Majority Leader Rick Berg, R-Fargo, said bringing up a special session is "getting the cart way ahead of the horse." Officials must assess what damages aren't covered by insurance before the state can discuss funding gaps that may need to be filled, he said.

Berg said the purpose of the rainy day fund, formally known as the Budget Stabilization Fund, is to provide a safety net for state agencies when the state experiences a revenue shortfall.

"I truly don't think we want to put those at risk if we have other resources to take care of the damage," he said.

State law allows the governor to transfer money from the rainy day fund to the general fund when the Office of Management and Budget projects that general fund revenues will be at least 2.5 percent below estimates.

"The only way that could ever be used (for disaster recovery) is if the Legislature passed a law appropriating money out of that fund," Sharp said.

Lawmakers could appropriate money from the state's Permanent Oil Tax Trust Fund without a change in state law, she said. The fund is projected to end the current biennium with more than $135 million, even after lawmakers siphoned $115 million last spring for property tax relief.


The state's Emergency Commission also oversees a $500,000 contingency fund that can be used for disaster response. Sharp said it's "very likely" the National Guard will request funding for aiding in Northwood's recovery.

State Sen. Tim Mathern, D-Fargo, said he recommends the governor use state agencies' existing budget authority to meet emergency needs and then ask the Legislature for a deficiency appropriation, which could come from one of the surplus funds.

Mathern and state Rep. Al Carlson, R-Fargo, both said they would be open to a special session if deemed necessary, but it's not likely in the near future.

"Would we take a look at it? You bet," Carlson said, adding it takes a lot of effort to convene the Legislature, and lawmakers would want a detailed breakdown of needs.

One fund that is available without special action by the Legislature is the state's Fire and Tornado Fund, which insures public buildings for 1,095 state and local governmental entities.

The fund will cover repairs to Northwood's school, city buildings, park, airport and fire hall, Insurance Commissioner Jim Poolman said.

"My guess is it will be around $3 million, but that is not a hard and fast number," Poolman said, adding he expects to release a total of all insured damages today.

The Red Cross has said damage estimates from Sunday's tornado range from $38 million to $59 million.


The Fire and Tornado Fund covers claims up to $1 million. Its reinsurance provider kicks in coverage above that amount, up to $100 million.

Poolman said a lack of severe weather-related damages in recent years allowed the state to slash premiums by 50 percent in July. The fund is still projected to end the 2007-2009 biennium with a balance of nearly $28.5 million.

"Frankly, I don't predict the premiums will go up because of this event," he said.

Hoeven spokesman Don Canton said the state is applying through FEMA for individual and public assistance grants and will use state resources to fill the gaps.

Hoeven already directed the National Guard, Highway Patrol, Electrical Board and departments of Emergency Services, Health, Human Services and Transportation to assist in the recovery.

"We're certainly applying all state resources that we possibly can already," Canton said.

North Dakota funds flush

- Permanent Oil Tax Trust Fund: $143 million (as of June 30)


- Budget Stabilization Fund: $200 million (current)

- Ending balance of general fund budget for 2005-2007 biennium: Around $300 million (rough projection; final figure isn't available)

Source: State Budget Director Pam Sharp

Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528

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