Other Views: Managing state’s prosperity is a new challengeLest North Dakotans go giddy about the recent revenue forecast, here are sobering numbers:
By: The Forum of Fargo-Moorhead, The Jamestown Sun
Lest North Dakotans go giddy about the recent revenue forecast, here are sobering numbers:
— 46 percent, or nearly half, of all the money is locked in constitutional funds, access to which varies depending upon how they were structured.
— 21 percent is dedicated to a sustainable property tax relief fund.
— 17 percent is reserved for distribution to local governments.
— 16 percent is the general fund’s share, the amount the Legislature has to spend on programs North Dakotans know and love.
So, while the forecast of a whopping $1.6 billion surplus by the end of the current biennium is jaw-dropping, the realities of the budget process — including escalating demands because of oil development, flood protection, law enforcement, health care, etc. — put the “windfall” in a more clear-eyed perspective. Yes, there is more money coming in now than in any time in the state’s history. But an awful lot of it is — and will be — held in funds dedicated to specific purposes and programs.
But is it not true the general fund will be larger simply because the revenue pie is so much larger? Seems logical. The general fund is capped at $300 million. When the cap is reached, the revenue stream flows to other places. The Legislature can raise the cap, and thus have access to more of the new revenue in order to further fund existing needs that are stressed because of oil and flooding, for instance. And there are other state sources of money besides the general fund for oil and gas impacts and water projects.
Regarding constitutional funds, there is no cap on the new Legacy Fund, which was approved by voters to jackpot windfall dollars from energy development. It has more money in it than was projected. But the amendment’s provisions block tapping the earnings until 2017. Other constitutional funds are more easily accessed, and there are hints coming from the administration of Gov. Jack Dalrymple and other places that maybe too much of the public’s money is tied up in special funds.
Let’s be clear: The new money is there — more of it than ever before — and more is coming. The next revenue forecast in November likely will be as startling as the current forecast. But here’s the rub: North Dakota government was structured — and a body of policy and law was developed — to manage scarcity, not the plenty pouring into coffers in 2012. The Legislature has yet to fully embrace the opportunities afforded by prosperity. That will be among lawmakers’ challenges when they gather early next year in Bismarck.