Burgum: Only tap oil tax fund for long-term initiatives

January 24, 2018
Shale Play

By JAMES MacPHERSON, Associated Press

BISMARCK, N.D. (AP) - Gov. Doug Burgum acknowledged Tuesday that earnings on a voter-approved oil tax savings account could be raided again to confront North Dakota's lingering budget challenges, but he insisted lawmakers only tap the fund for initiatives providing long-term benefits.

The Republican's 90-minute State of the State address at Minot University was the first such speech by a governor in a non-legislative session year since John Hoeven in 2002.

Burgum said lawmakers shouldn't touch the principal on the Legacy Fund, which voters enacted in 2010, and should use the interest not "just to fund basic services" but for programs he called transformative. He gave no specifics but challenged North Dakotans to come up with innovative ideas to achieve that.

Burgum said the state has "unlimited promise and potential, provided that we embrace change, we diversify our economy and harness the unstoppable forces of technology."

The first-term Republican governor took office amid a sharp downturn in tax revenues due to prolonged slumps in oil and agriculture prices. The state's budget was balanced last year through layoffs, and raids on state savings, including $200 million from the Legacy Fund that was approved by voters in 2010 and requires setting aside 30 percent of state tax revenues on oil and natural gas production in the fund.

The fund currently holds more than $5.1 billion. Burgum said he does not endorse attacking the fund's principal, which would need a two-thirds vote of the North Dakota House and Senate to do so.

Burgum, who has had a testy relationship with the GOP-led Legislature, commended lawmakers for their "teamwork" in helping pass a $4.3 billion general fund budget for the current two-year budget cycle - and $1.7 billion less than the one passed in 2015.

Burgum is known in North Dakota as the godfather of software for building Fargo's Great Plains Software into a billion-dollar business, which he later sold to Microsoft. He campaigned on a promise of controlling spending and "reinventing government."

But Burgum's speech was largely unscripted and was short on policy specifics, focusing mostly on his first year in office. He choked up several times during the speech, from talking about substance abuse in the state to his introduction of Lt. Gov. Brent Sanford.

He did not address his ongoing veto fight with the Legislature which is headed to the state Supreme Court. Lawmakers allege Burgum violated his line-item veto power last spring by deleting words or phrases on several spending bills in a way that changed intent.

The state's high court has not scheduled a date for the arguments.



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