Burgum: Tax relief, ARPA investments will benefit ND citizens now
Gov. Burgum writes, "Rather than allowing inflation to eat away at the state’s ARPA (American Rescue Plan Act) funds, we should harness their investment power now and bid projects for next season."
North Dakota is always competing.
We compete with other states, and even other countries, for businesses, jobs and the workers needed to fill them.
We compete for workers who choose which state to live in based on our economic strength and opportunity, our infrastructure and communities, and our quality of life.
So, when the opportunity arises to make sound investments in our state and provide meaningful tax relief to our citizens using unanticipated resources – at a time when our financial condition is strong and our reserves are full – we would be wise to seize the opportunity.
This is the decision facing the North Dakota Legislature.
Our administration recently rolled out Accelerate ND , a package of strategic and sensible recommendations for investing North Dakota’s state allocation of federal funds from the American Rescue Plan Act. We also put forward a proposal for $407 million in excess ending fund balance from the 2019-21 biennium thanks to our strategic use of federal funding last year and better-than-expected revenue collections and Legacy Fund earnings.
Of these recommendations, the easiest one for our Legislature’s conservative supermajority to adopt should be to provide a two-year credit on individual income tax for North Dakota residents, up to a maximum of $500 per filed return, per year.
This proposal will save taxpayers an estimated $207 million over two years. Approximately 218,000 North Dakotans who pay $500 or less in income tax annually would have no income tax bill in 2021 and 2022. Roughly 133,000 residents who pay more than $500 in income tax annually would have their bill reduced by $500 each year.
It’s only right to reward the citizens who pay taxes and kept our economy functioning during the pandemic.
Instead of leaving $207 million sitting at the bank earning .07% interest and allowing the corrosive power of inflation to diminish its worth over the next two years, we believe this money will do more good in the pockets of North Dakotans.
The Accelerate ND plan will support growth, diversify our economy, make our state more competitive, enhance government services and create long-term cost savings for the citizens of North Dakota – all without raising taxes or growing government.
Our reserve funds are flush. At $749 million, the rainy-day Budget Stabilization Fund is filled to its maximum limit set by the Legislature. More than $597 million in cash sits unobligated in our Strategic Investment and Improvements Fund. These funds totaling over $1.3 billion can cover any needs or shortfalls that arise before next session.
Rather than allowing inflation to eat away at the state’s ARPA funds, we should harness their investment power now and bid projects for next season.
The Legislature last spring already approved $423 million in authorized but unfunded appropriations for transportation infrastructure ($317M) and capital projects ($106M). We’re recommending they fund these projects in a single action now with the state’s ARPA funds.
Forum Editorial: North Dakota’s on an economic roll, but we have to be smart to sustain it North Dakota has a dazzling array of industrial projects in the pipeline that will help expand and diversify the economy. The state has a rare opportunity to sustain that kind of progress by enacting the strategic investment plan outlined by Gov. Doug Burgum.
Of the remaining $697 million in ARPA funds, we recommend investing nearly half, or $326 million, into workforce and economic development to address our state’s biggest obstacle to economic growth – the workforce shortage. Our recommendation also includes an additional $237 million for infrastructure and $134 million for emergency response, health care and improving the efficiency of citizen services.
Instead of leaving these funds in a low-earning checking account, Accelerate ND targets the ARPA funds and excess fund balance at areas with a high return on investment, including numerous projects requiring a 1-to-1 funding match from the private sector.
We should not squander this opportunity. North Dakotans deserve tax relief when government collects more money than it needs. Now is the time to invest in our workforce, our infrastructure, our economy and our quality of life.
Let’s accelerate past our competition and put North Dakota in the best possible position for future growth, economic diversity, and success.
Doug Burgum was elected governor of North Dakota in 2016.
This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.