North Dakota Democrats Wanted to Drain North Dakota’s Reserve Funds to Avoid Spending Cuts

Tom Stromme/Bismarck Tribune

Senate Majority Leader Rich Wardner (R-Dickinson) speaks to lawmakers in support of Republican legislation to address the state's budget shortfall during a special session this week.

As I noted earlier, there was a lot of grandstanding in the state Senate today as Democrats proposed amendments to the Republican budget fix bill which they knew would be rejected, and then subsequently characterized that rejection as Republicans being insufficiently compassionate about the elderly and infirm, etc., etc.

Here, from Bismarck Senator Erin Oban, is one of the more typically smug reactions Democrats are carpet bombing social media with:

I’m sure Democrats are hoping the “Republicans hate poor people” message will obscure the reality of what they were proposing. Because what they wanted to do is drain money from state reserve funds to avoid spending cuts which are probably inevitable. Here’s a summary of the Democratic amendments rejected in the Senate today from the Bismarck Tribune (emphasis mine):

Mathern’s proposed amendment called for transfers to the state general fund of about $249 million from the Strategic Investment and Improvements Fund, $25 million from the Budget Stabilization Fund and $25 million from Bank of North Dakota profits.

Mathern said the Democrats’ plan would leave a $50 million fund balance.

The fund transfers would protect from further cuts to human services and corrections, according to Mathern. In addition, it would preserve a 12 percent state-paid property tax credit to residents, preserve federal Medicaid matching dollars, and help fund mental health and addiction treatment services.

“We need to be more strategic about that,” Mathern said of the cuts.

It’s ironic that Senator Mathern would talk about strategy, because what he was proposing would have put the state in a touch position when the regular legislative session begins in January.

Remember that any reserve funds used by this special session of the legislature to shore up this biennium’s budget will be unavailable to help make ends meet in the next biennium’s budget.

North Dakota’s lawmakers built a boom-time budget based on boom-time revenues, but those boom-time revenues have gone away now. Our state’s fiscal outlook is falling back down to reality. It’s time for spending to do the same.

Democrats wanted to delay that by draining state reserve funds. Maybe they are hoping that more revenues would appear in the next biennium. Maybe they want tax hikes. But I think the Republicans are right to do the painful budget work during this special session rather than putting it off for the next biennium.

If anything, as I wrote earlier today, Republicans ought to be pushing for deeper cuts now.

The more pain we deal with now, the less pain we’ll have to deal with down the road. Because absent massive tax hikes, our state budget simply cannot maintain boom-time levels of spending post-oil boom.