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TJ Jerke, Forum News Service, Published January 05 2013

Cash-rich North Dakota Legislature must choose best way to spend it

BISMARCK – North Dakota lawmakers are bracing themselves for an 80-day money-grab that starts when the 2013 legislative session begins Tuesday.

Elected officials will look to spend Republican Gov. Jack Dalrymple’s proposed $12.8 billion 2013-15 biennium budget – just short of

$3 billion more than the current two-year budget of $9.9 billion – as the state tries to keep pace with rapid growth in western North Dakota.

Rep. David Drovdal, R-Arnegard, said investments need to be made now while funding is plentiful, but the Legislature also needs to play it safe on spending.

“Everyone is going to want money,” said Drovdal, whose District 39 covers much of southwest North Dakota. “We are going to have to learn to say no.”

Party leaders expect the session to focus on spending the state’s new wealth on infrastructure in oil-impacted areas, property tax relief and dealing with the long-term impacts of the oil boom.

According to Dalrymple’s proposal, a $1 billion surplus will be created over the next two years as state general fund revenues total about $4.8 billion while ongoing expenses will only cost $3.8 billion.

An estimate released in September projected a

$1.6 billion surplus for the current biennium, which ends June 30.

“With having a large surplus there seems to be a lot of ideas on how to spend it, and it’s our job to make sure we don’t overspend,” House Majority Leader Al Carlson said. “We are fortunate to have the funding, but when you have one-time revenues, you have to use them wisely.”

Senate Minority Leader Mac Schneider, D-Grand Forks, said North Dakota has tremendous needs and an unprecedented opportunity to address them with a large budget to work with.

“The needs in the Oil Patch are great, and I don’t think the state government has addressed those needs,” Schneider said. “I hope this session isn’t spent playing catch-up. I’d like to feel that we can get ahead of the game.”

Both leaders said they also plan to hear many discussions about early childhood development, drunken driving laws and statewide water development, among several others.

Long term

Schneider said infrastructure in oil-producing counties is one of the largest priorities and is deeply needed, but so are long-term investments in North Dakotans. With a large amount of one-time money available, he said, investing now for the future of the state is critical to ensuring a strong future.

Schneider anticipates discussions about North Dakota’s Legacy Fund, which deposits 30 percent of the state’s oil revenues into a fund that cannot be spent until after June 30, 2017.

“If we don’t find a way to make sound investments in people, I think we will fail as policy makers,” he said. “We should be doubling down on smart investments – people are going to be here long after the last drop of oil is extracted.”

Taxes

Legislators have heard many concerns by constituents about property tax relief during forums held in their districts.

Drovdal, who was speaker of the House in the last session, said many of those concerned are oil and gas companies.

“We need to get money back to them,” he said.

But proposals in Dalrymple’s budget for tax cuts for various businesses are proposals that “missed the mark” and will likely be scrutinized during the session, Schneider said.

For instance, Schneider said, the proposed $25 million corporate income tax cuts, which would give income tax cuts to large businesses like Target and Wal-Mart stores, is one concern among many.

“What we’ve done in the past two sessions doesn’t have people jumping up and down saying how great the Legislature is doing in regards to property taxes,” Schneider said.

Republican control

The Legislature will convene with a Republican-controlled House and Senate – the House split 71-23 and the Senate split 33-14.

Drovdal says the Republican Party has a lot of weight on its shoulders and is in a position to elevate the state to a point where it has never been before.

“If things don’t go right, we know who is going to get blamed, and should get blamed for it,” he said. “We have an opportunity to really show our leadership.”

Schneider hopes political distractions and legislative mischief aren’t an issue this session. With so much on the line, Schneider said, he hopes non-germane issues stay out of discussions.

“There are 80 days once every two years. We don’t have time to get sidetracked on bills that take up too much time,” Schneider said.


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Reach Bismarck reporter TJ Jerke at tjerke@forumcomm.com or at (701) 255-5607