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Letter to the Editor: Legislators should invest in N.D.'s people

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Some North Dakota legislators are insisting they must cut funding for services that invest in North Dakota's people and future economy to balance a $138 million general fund deficit. But this argument doesn't hold: legislators have manufactured the "deficit" by spending available funds on tax breaks and shifting funds into reserves, where they are off-limits for spending in the coming budget cycle.

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Currently, there are over a half billion dollars in tax reductions and exemptions under legislative consideration. Some tax breaks may be warranted, but they should be targeted primarily to North Dakotans working to sustain or achieve a middle class life. By offering such a huge amount of tax breaks to companies and households, the legislature has sharply reduced the funds available for investments in the education, health, and safety of North Dakota's people. Now, they say, the only option is to cut funding for those investments and services. That's disingenuous.

Some legislators also want to reduce funds for state services in the future by eliminating the permanent oil trust fund (HB1451), an account that holds oil revenue and is available for spending by the legislature when needed. Eliminating this fund would shift $52 million into the Legacy Fund, already slated to receive $612 million at the end of the biennium. Funds cannot be accessed from the Legacy Fund until after 2017 and then, only with a vote of two-thirds legislative majority. In other words, if the legislature eliminates the permanent oil trust fund, some funds currently available for state services would be much harder to access in the future.

Eliminating, or even just spending down the permanent oil trust fund will also shift more money into the state's "rainy day" fund, the Budget Stabilization Fund, which is not accessible except during times of revenue shortfall. This will happen because the legislature is shifting most of the funds from the permanent oil trust fund into the General Fund. This increases the size of the General Fund, which in turn allows the Legislature to spend more on tax cuts. Increasing General Fund expenditures increases the amount legislators are allowed to place in the Budget Stabilization Fund.

Legislators who claim that they cannot invest more in North Dakota's people, and even must reduce funding for state services in this time of plenty, are not telling the whole story. They could choose to make these investments, but so far they have other priorities.

April Fairfield

North Dakota Economic

Policy Project

Bismarck, N.D.

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