Lawmakers have mixed view of governor’s budget | News, Sports, Jobs



The governor’s plan to use revenues from the North Dakota Oil Tax Trust Fund to support bonding of infrastructure projects receives a mixed response from Minot’s Republican legislative delegation. While some say it makes financial sense to use the Legacy Fund to capitalize on today’s low interest rates, others are cautious about borrowing, especially with trust fund dollars.

The bail plan is one component of a proposed $15 billion budget released Thursday by Gov. Doug Burgum.

The plan includes a $700 million revolving loan fund for political subdivisions, created through state borrowing. A percentage of the Legacy Fund’s earnings would repay the original loan, while the revolving loan fund created with that original loan would continue on a permanent basis. The selling points for borrowing now are the extremely low interest rates and the ability to avoid the inflationary costs associated with postponing projects until cash is available.

Burgum said an existing revolving loan fund through the Bank of North Dakota is limited to meeting the needs of political subdivisions due to loan caps and other restrictions. The additional loan fund could provide money, for example, to increase the National Water Commission’s funds for Minot flood control.

The $700,000 loan fund is part of $1.25 billion in borrowings proposed by the governor. The loan includes $323 million for infrastructure, such as a $30 million project to improve safety on U.S. Highway 52 from Minot to Carrington by adding passing lanes, known as “great two-way” concept. Among the $182 million borrowing for state-owned facilities is $19 million for deferred maintenance of higher education campuses.

Sen. Randy Burckhard said the governor’s bail plan has merit.

“We have major projects in this state. We have transportation needs. We have big water projects,” he said. “These are legacy type projects because they last for years. If you were to pay them with bonded debt, you could save tens of millions, if not hundreds of millions, over 30 years, so I think the idea of ​​bail will be supported.

Representative Larry Bellew said he was not a fan of loans, but would keep an open mind to bail offers. However, he does not want to use Legacy funds to build links. He prefers inherited income to be used to reduce income tax or reform property taxes.

Overall, Minot lawmakers are still weighing the details of the governor’s budget.

“I think he was a bit generous with areas and not so generous in other areas,” Bellew said. “The overall budget, I think, is probably higher than it should be in terms of spending, and that’s something we’ll have to look at closely when we go into the session.”

However, Bellew likes the budget plans to bolster the employee pension fund and maintain aid to K-12 schools.

“I wish we could increase that a bit, and that’s what we’ll have to look at during the session as well,” he talked about the financing of education.

Rep. Scott Louser said he hoped to hear a commitment to fund flood control in the Minot area, but didn’t see an appropriation in the budget.

“So I’ve already started working with a few of my colleagues to make sure that commitment is delivered,” he said.

Louser said he was pleased with the governor’s call not to raise taxes and the proposal to use Legacy Fund revenues to support the bond.

“The idea of ​​infrastructure bonding is very intriguing to me, with interest rates as low as they are,” he said.

“I thought it was a very fair budget,” said Senator Karen Krebsbach. “The bonding package that I love.”

She said the Senate would also consider a package of infrastructure bonds being prepared by Senate Majority Leader Rich Wardner, R-Dickinson, but she likes the concept of using Legacy Fund revenue to repay the obligations.

Krebsbach is more concerned about the governor’s proposed changes to Medicaid Expansion that reduce provider reimbursements at a time when they are grappling with a pandemic. She also has reservations about the 7.5% cut the governor is suggesting in the higher education funding formula. Schools are already seeing less money as students affected by the pandemic are unable to complete their credit hours, which is a factor in the funding formula, she said.

“The idea of ​​taking an extra 7.5% out of it is not healthy for higher education,” said Krebsbach. “If we can even minimize it, that will help.”

Burgum explained that the 7.5% reduction applies only to the state-funded portion of campus revenue. For example, Minot State University would see a reduction in total revenue from all sources of approximately 2%. Burgum said the university could recoup formula dollars and make up for that loss through expanding credit hours and recruiting efforts that would lead to increased enrollment.

“There’s a silver lining in there” Burgum said. “This formula incentivizes universities to do more of what they do well, which is to reach students where they are, because it’s not just about reaching 18-22 year olds. It’s about reaching adults. It’s about teaching courses and masterclasses to retirees who want to get more education. There is the online opportunity. You can offer classes to people who are not even in our area or state online. So there are many ways for universities to generate more revenue.

The governor also offered additional funding for vocational and technical education projects.

“We’ve invested $45 million, and if there’s more demand than that, I think it would be smart if the Legislature could find a way to move even more dollars, because they have such a strong balance sheet.” , Burgum said.

The money would be provided in the form of individual grants to match local commitments. Minot’s proposed CTE project could apply, but lawmakers will need to determine what kinds of local funds could be considered for the game.

“We just want to take state money and leverage it,” Burgum said. “Any business that is interested in the workforce, this is a really easy way for them to step in and also make in-kind donations.”

Infrastructure bonding and workforce training are among the budget concepts supported by Rep. Jay Fisher.

“We must continue to build and replace long-term infrastructure like NAWS and flood control, invest in vocational and technical education for our children and grandchildren to ensure a talented workforce, and invest in research and innovation. The long-term return on investment will be incredible for our great state. Leveraging a portion of our 1-1-1/2% Legacy Fund when inflation is 2-3% is a smart business decision to meet our immediate needs and build our future. I look forward to going to work in January to help refine the governor’s initial budget,” he said.

“I thought it was a very reasonable proposition,” Senator David Hogue said of the budget. “I’m generally in favor of the affair.” With interest rates at unusually low levels, he said, “There is a window of opportunity, and people in the private sector are realizing that as well. So I think when you can borrow money at that rate, we should.

Rep. Bob Paulson said the governor made valuable input into the budget process.

“I liked his recommendation not to increase general fund spending, acknowledging the difficult budget scenario we face. I also liked the focus on efficiency, proposing that the salary increases for state employees be based on performance and allowing additional increases if efficiencies can be found within the agency,” he said. “I fear that when you combine the Governor’s bond proposal with Senator Wardner’s, it would double our state’s bond commitment in a single fiscal year. I hope there is an overlap and efficiency that can be found between the two, if we go ahead with the linkage.

Representative Jeff Hoverson said the government needs to take financial cuts and feel the burden of the pandemic like citizens and businesses are feeling. He said he would rather have a tax holiday or use Legacy Fund money to give back to taxpayers than create more ways to spend money for the government.

“It would stimulate the economy. It would help reduce the government,” he said.

“I’m torn on the bond,” Representative Dan Ruby said. “It makes sense, to some degree, to do this and do more, and then spread the cost of that over a longer period and over a future tax base of people.”

On the other hand, he said, it locks in future legislatures with continued debt.

“It’s something I’m going to consider, and certainly, if it looks like it could be a saving over time and doing things that we might not have done if we tried to do everything in species, so maybe I’ll be willing to consider some of that,” he said.

In general, however, Ruby expressed concern about the revenue available to support the governor’s budget.

“So I think that’s going to be very much determined by what kind of revenue forecasts we’re going to see throughout the session,” he said, “Then just see if what he’s asking is even achievable.”

Burckhard chose acting Senate president

Sen. Randy Burckhard, R-Minot, will serve as interim president in the upcoming 2021 legislative session.

As interim president, Burckhard will preside over the Senate in the absence of the lieutenant governor and participate in various leadership activities.

“I am very honored” Burckhard spoke about the selection that took place during the legislative organizing session last week. A District 5 senator since 2011, Burckhard is a retired communications executive with SRT.

He served on the Legislative Management Committee during the interim and was active in the Minot community. He is a former member of the Minot City Council, past president of the Convention and Visitors Bureau and the Minot State University Alumni Association, and past president of the Minot Area Chamber of Commerce, Minot Area Development Corporation, and Mouse Valley United Way. He was also engaged in military and MSU support organizations.



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