Article by, Jordan Kannianen – District 4 Senator
Hello again, as we conclude a short week after returning from crossover break. The second half of the session will be where the rubber meets the road on budget decisions. A new revenue forecast is due to be released March 9th, and this will be the workable baseline for the Appropriations Committees as they fine-tune each line item in every budget. Some budgets that passed one chamber in the first-half (which were already reduced 10% – 15%) may need to be amended lower in the other chamber if revenues keep coming in below forecast (January sales tax revenues came in $33 million below the July 2016 forecast). Many difficult and unpopular decisions will have to be made for the long-term financial benefit of our state.
As I mentioned in a previous week, up to a total of $170 million may be drawn from the Bank of North Dakota to fill gaps in the general fund and other funds. In past decades it was common practice to take $40 – $60 million of the bank’s profits every biennium for general fund spending. However, the profits were left alone and allowed to grow for many years during the late 90’s and 2000’s, greatly strengthening the bank’s financial position. Now, even with the $100 million draw last session and the proposed $170 million draw this session the bank would still maintain more than 10% liquidity on their balance sheet (the benchmark for strong financial health of a lending institution).
The proposal I oppose is the withdrawal of funds from the Legacy Fund to use for general fund spending. I wish the interest, if spent at all at this point, would only be spent on long-term investments rather than on propping up budgets. There is support from some to use it on general fund budgets, however. The growth of the fund will be severely stunted in future years if we draw too much out of it too early, running the risk of turning it into just another slush fund to be raided when things are tight rather than it being a true Legacy Fund. That debate will come to a climax in a few weeks.
I’m grateful for the few people from the district that have visited with me here at the capitol recently, and I again thank you for your communications with me in any manner. Please let me know your thoughts on any and all issues. Have a great week!
*Jordan Kannianen is a Senator from District 4. Jordan serves on the Education and Political Subdivisions Committees.
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