The North Dakota Legislature is flummoxed about what to do with the Legacy Fund, the state’s piggy bank of oil revenues. The fund, which voters approved in 2010, has an impressive balance of $5.6 billion.
But lawmakers utterly lack vision for the fund, a powerful strategic asset to improve the state’s economic future. It’s a shiny rifle hanging over the fireplace mantle that the Legislature loves to look at but doesn’t want to touch.
Inexcusably, the state still lacks a road map for the Legacy Fund nine years after its creation.
So far, the Legislature’s most significant use of this vital asset came in 2017 when they siphoned $200 million in earnings to balance the budget, hardly a strategic investment.
The best idea we’ve seen to tap the Legacy Fund’s earnings is Gov. Doug Burgum’s proposal to use $50 million to match $100 million in private donations to establish the Theodore Roosevelt Presidential Library and Museum at the entrance in Medora of the national park named in his honor.
That project was among a $300 million slate of projects of statewide importance the governor recommended.
But the Legislature doesn’t appear interested. Thus far, legislative support of the Roosevelt center is to provide an endowment, including $10 million that already was already set aside for the library and museum, as well as authorization for a $35 million loan from the Bank of North Dakota.
A loan. Really? That’s the best legislators can do for a project that promises to elevate that state’s visibility on the national and even global stage and lure visitors?
Sen. Rich Wardner, R-N.D., the Senate majority leader and the author of the funding compromise, has suggested the Legacy Fund could be used to repay the loan.
“I don’t care how you cut this,” Wardner said. “This is a legacy project. It is a legacy project.”
Our point exactly.
After almost a decade — and with absolutely nothing to show for the Legacy Fund’s steady accumulation of billions of dollars — legislators have to worry how long taxpayers will be content with a big fat piggy bank balance and no tangible benefits.
Honestly, what are they waiting for? Nobody has been advocating spending the fund’s principal. We’re talking about investing a portion of the earnings in North Dakota to create a better future for the state.
Sen. David Hogue, R-Minot, warned his fellow lawmakers of that problem last year, when he said the growing pot of money could be targeted by an initiated measure. “If we think we’re going to sit on this like a nest egg … we’re being very naive,” he said. “I see the Legacy Fund as a huge target.”
Unfortunately, legislators’ response to that possibility has been to try to insert themselves into the initiated measure process, thereby weakening voters’ unencumbered ability to amend the state constitution at the ballot box.
More appropriately, Hogue proposed an ambitious infrastructure investment program using Legacy Fund earnings, but the idea was shot down, a bad decision in light of the fact we just learned that almost 11 percent of North Dakota’s bridges are “structurally deficient” but could be repaired for $244 million.
The Legacy Fund’s balance in 2025 is projected to reach $14.4 billion if no earnings are withdrawn or $12.6 billion if all earnings are tapped.
So far, the idea that seems to have the most support among lawmakers is to use the Legacy Fund to eliminate the state income tax. That’s a bad idea. There’s no outcry to eliminate the income tax. Taxpayers are howling about their property taxes.
If the Legislature keeps refusing to devise a plan to invest some of the fund’s earnings wisely, it’s only a matter of time before someone will circulate petitions to amend the state constitution to allow per-capita payments to residents, as Alaska does with some of its oil wealth.
North Dakota legislators just could wake up one day and find that voters have hijacked the Legacy Fund.
Maybe they’ll come up with some inspiring investment ideas in the final days of the session.