Republican Legislative Leaders Announce Propose New Funds for Infrastructure (And Hint at Legacy Fund Lending Program)
The leadership of the North Dakota Legislature – specifically House Majority Leader Al Carlson, a Republican from Fargo, and Senate Majority Leader Rich Wardner, a Republican from Dickinson – are traveling the state today to announce a big new spending package to address infrastructure needs and, according to their press release, lower local tax burdens.
I’m told they’ll be in Bismarck this morning and Fargo this afternoon.
“The Legislature has focused many infrastructure spending priorities over the six years to the oil producing counties, and while that money was needed and well spent, this new package will focus on reducing the local tax burden so that non-oil counties can share in the benefits,” Carlson is quoted as saying in the release which you can read in full below.
I don’t like the argument about reducing local tax burdens. Lawmakers like to make that argument often when they engage in local spending projects, but it’s not really tax relief. Any reduction in taxes, if it does happen, lasts only as long as the state spending does as we learned during the era when lawmakers were trying to buy down property taxes.
Though, to that point, this isn’t so much a one-time spending package as a new mechanism for state funding local infrastructure. The legislation would create three new infrastructure funds – or “buckets” to use the parlance lawmakers are fond of – into which oil tax revenues would flow.
Here’s the outline from the release:
Along with this press release I was provided with funding estimates for the cities/counties which you can read by clicking on those links.
Perhaps the most interesting part of the release, however, is this cryptic line buried at the end: “Legislative leaders are also discussing the possibility of using Legacy Fund earnings to expand the
existing infrastructure loan program.”
That’s a reference to a whale of an idea floated by a group of lawmakers back in March. What they’d like to do is use the state’s Legacy Fund – a constitutional fund created by lawmakers and ratified by voters in 2009 which now holds over $4.4 billion as of June of this year – to invest in loans to local governments for certain types of infrastructure projects. The idea is that the state would essentially be investing up to 15 percent of the fund into financing local projects at low interest rates. The Legacy Fund would lose out on some earnings due to the low interest rates, but the taxpayers would also save big thanks to those same low rates.
Plus, there are a lot of advantages inherent to the state essentially doing business with itself.
For what it’s worth State Treasurer Kelly Schmidt, whose office manages deposits into the Legacy Fund, opposes the idea.
Here’s the full release:
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