North Dakota voters approved a constitutional amendment to divert 30% of the state’s oil tax revenues into a new fund called the Legacy Fund. The original projection for the balance of that fund was $600 million by the end of the current biennium at the end of June.
As of today, the balance is already at roughly 166% of that projection.
Which is just another data point showing just how much revenue growth the state is enjoying.
It’s also why the legislature’s push to raise taxes on the oil industry, rather than lowering and simplifying them, is so maddening.
You almost get the idea that they want to maximize revenues, instead of just raising what revenues are necessary for the functions of government.
Here’s the press release from State Treasurer Kelly Schmidt’s office:
State Treasurer Kelly Schmidt will transfer $80.5 million into the Legacy Fund for the month of April. With this transaction the total deposits made to the Legacy Fund since its inception will exceed $1 Billion.
“The original projections estimated deposits to the Legacy Fund at just over $600 million at the end of the 2011-13 budget cycle,” stated Treasurer Schmidt. “We have topped one billion dollars in only twenty months. This level of growth is truly amazing!”
Under Article X, Section 26 of the North Dakota Constitution, thirty percent (30%) of all revenue derived from North Dakota’s oil and gas extraction and gross production taxes are deposited into the Legacy Fund. During the last three months the deposits to the Legacy Fund have been bolstered by a statutory provision which diverts twenty-five percent (25%) of the allocation to the Strategic Investment and Improvements Fund (SIIF) to the Legacy Fund, if the SIIF exceeded $300,000,000 during the previous month. “This provision has contributed an additional $69 million to the Legacy Fund since the trigger was met in January,” commented Schmidt.
Neither the principal nor the income of the Legacy Fund may be spent prior to July 1, 2017. Income earned after this date will be transferred to the state General Fund at the end of each two-year budget cycle. To spend any principle of the fund will require a two-thirds majority vote of both the House and Senate.
The Legacy Fund is invested by the State Investment Board of which Treasurer Schmidt is a member.