Don’t Spend the Legacy Fund (Unless You Spend It in My Back Yard)
I’ve long argued that the pot of billions of taxpayer dollars we call the Legacy Fund represents a moral hazard. Which is to say that it’s a pile of money created for no defined purpose that will now but the subject of much hypocritical political wrangling.
For some insight into what I’m talking about, witness this Grand Forks Herald editorial from over the weekend.
“The Herald has been a proponent of using a portion of Legacy Fund earnings to fund university research initiatives. We still back that proposal and ideas similar to it,” they write.
But then they continue with this: “The Herald does not, however, believe Legacy Fund dollars should be dedicated for general use that is not forward-thinking. For instance, we are against a plan to use Legacy Fund earnings to reduce the state income tax.”
[mks_pullquote align=”left” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]The Grand Forks Herald has a research university in their back yard, so of course that fits their definition of a “forward-thinking” project which “will provide statewide impact and span generations.”[/mks_pullquote]
The paper says they “believe Legacy Fund dollars should be tapped for projects that will provide statewide impact and span generations” but I suspect what they really mean is that Legacy Fund dollars should used to benefit their community.
The Grand Forks Herald has a research university in their back yard, so of course that fits their definition of a “forward-thinking” project which “will provide statewide impact and span generations.”
That it leaves the rest of us without a research university in our community out in the cold apparently doesn’t matter.
This is rank parochialism. Worse, it’s hypocrisy coming as it does alongside a condemnation of leverage the Legacy Fund to reduce, and eventually eliminate, state income taxes.
If the Herald’s criteria for using the Legacy Fund is proposals with statewide, generational impact how can they be opposed to eliminating the income tax?
It wouldn’t reduce the state’s revenues. Income tax revenues would be replaced, over time, with Legacy Fund earnings. The proposal before the Legislature is designed to be revenue neutral.
That proposal also wouldn’t make us more dependent on the oil industry, despite what some have claimed. The revenues would come from the Legacy Fund’s investments, not taxes generated by oil and gas activity.
Plus, by using only half of the Legacy Fund’s earnings in a given budget cycle, and none of the fund’s principal, there would be plenty money left over for other initiatives. Like maybe throwing pork at the Grand Forks Herald’s favorite university.
I believe we’re going to end up doing a lot of stupid things with the Legacy Fund. I hope I’m wrong, but that’s what usually happens when you leave a lot of money sitting around in government.
Before we do those stupid things, could we at least do one thing that would benefit every working North Dakotan?
Is that really too much to ask?