Legislators say session treated Minot well
Legislators find things to like, dislike from session
Minot legislators came away from their 2021 session with mixed levels of comfort regarding a record state budget of nearly $17 billion. However, they feel good about legislative actions on issues of direct concern to Minot, including funding for flood control and the Northwest Area Water Project.
The Legislature provided $74.5 million for the Mouse River Enhanced Flood Protection Project, which fulfills a six-year commitment to provide $193 million, according to legislators. About $30 million of the $74.5 million is money re-appropriated after being turned back last year due to pandemic-related budget contraction. Although not a funding commitment, the Legislature indicated an intent to eventually invest $604 million into the flood control project, expected to cost over $1 billion.
NAWS could receive $33.6 million in new funding this biennium, along with access to a $50 million line of credit to keep the project on track if federal money for the biota treatment plant construction is slow in arriving. Ground work for the plant construction has started.
The appropriation gets the project to the point where NAWS can start treating and moving water from Lake Sakakawea, said Sen. David Hogue, a member of the Senate Appropriations Committee. It will be at least three years, though, before construction is completed to enable Minot to begin receiving the water. In addition to the biota plant, the intake structure, reservoir and associated construction will need to occur.
Another positive for Minot during the session was the approval of $5.9 million that will allow for an expanded design for the Magic City Discovery Center, set to begin construction soon.
A proposal to provide $10 million to support intermodal operations proved to be the most contentious of the bills with direct impact on Minot. In the end, the Legislature appropriated $2 million for railroad track expansion. It declined to fund a purchase by Minot Area Chamber EDC of intermodal assets held by three banks that obtained the assets through foreclosure on a previous operation.
Minot legislators said the $2 million addresses the immediate need to meet BNSF Railway’s lease requirement to have additional track in place by Aug. 1. Time exists to resolve the remaining issue of the assets, they said.
“In the end, we did what we could do to satisfy keeping that facility operating,” Rep. Randy Schobinger said. “As long as we were able to do that, I can live with the bill that was passed.”
“We made a decision that was fiscally responsible and yet moved the ball in the right direction,” Rep. Bob Paulson said. “I did not support the bill as originally submitted that would have paid off all the loans from the three banks involved, but it was critical that we get the spur built and keep the current operator here and operating.”
When it comes to the overall state budget, Minot legislators consider the document to be a mix of both successes and disappointments.
Hogue applauded the $70 million in federal CARES Act funding to provide grants to communities for career and technical centers, which could advance Minot’s plans to establish a center.
“We’ve been talking about doing that for an awfully long time,” he said. “I hope that we can get moving on that.”
Grants would range from $500,000 to $10 million.
Sen. Randy Burckhard listed a number of good moves by the Legislature, including passage of his bill to invest $750,000 in updates to the State Capitol to meet Americans with Disabilities Act standards. He also was pleased with passage of pandemic funding for summer school for any kindergarten through fourth grade students, with emphasis on reading and math.
Schobinger noted the Legislature agreed to set aside $500,000 toward a plan that would provide for a private entity to construct a new State Hospital building in Jamestown, to be leased by the state.
“The way we provide services has changed so dramatically over the last 100 years that just the way that facility is set up doesn’t accommodate that anymore. So I’m happy to see that we’re down the road to potentially have a new state hospital situation,” he said.
Rep. Jeff Hoverson said he was disappointed overall with how the session went.
“North Dakota citizens would have been better off if we would have stayed home. I don’t think we did North Dakota much good. We hit a record. We increased the budget over $2 billion again and we broke last session’s record,” he said.
“We gave zero tax relief,” he added. “We just can’t seem to give freedom and power or money back to the people, and that really bothers me.”
“”I wish that we could do more to help people out with lowering taxes, given the good situation we’ve been in with the budget,” Schobinger said. “I hope the day comes that we’re able to offer up real tax relief for the people of North Dakota.”
Sen. Oley Larsen called the lack of tax relief and continued out-of-control spending disappointing. He also disagreed with removing the sunset on Medicaid Expansion to allow the program to continue.
“If we put more money into Medicaid and get rid of the Expansion part of it, I think we’d be better off,” he said.
However, he added it was a good session for Minot’s future economy with plans for Super 2 passing lanes on U.S. Highway 52, funding for the intermodal facility and support for a pilot project for extra-long semi-trucks on certain highways.
Sen. Karen Krebsbach was pleased to see additional Challenge matching grants within the University System to support academics as well as government streamlining through the merger of the departments of Health and Human Services.
Krebsbach called the budget expenditures reasonable and conservative, given North Dakota’s needs and the desire to avoid causing property taxes to rise on the local level.
“We are a growing state. Because we are a growing state, we have to invest in infrastructure, education, roads,” she said.
She said the influx of federal pandemic dollars does skew the budget picture because those dollars account for a significant share of the increase.
Even without the federal money, the budget was higher than he would have liked, Paulson said. Hogue also said the spending was more than he was comfortable with, but he added the Legislature was careful to avoid creating ongoing obligations with the federal dollars. He said using some of the federal money to help school districts with facilities maintenance will address funding difficulties in that area.
Legislators also differed in their views of Legacy Fund spending.
Krebsbach said the various appropriations of Legacy Fund earnings will pay off, as will the 20% of Legacy Fund investments that will be required to remain in the state.
Schobinger said he came to support investment of a percentage of the Legacy Fund in North Dakota after an initial hesitancy.
“There’s a lot of money involved there so we’ve just got to make sure that those investments are in the places that do the people of North Dakota the most good,” he said.
Burckhard called the Legacy Fund bills one of the major events of the session. One key feature is the loan money for public infrastructure.
“We won’t touch the principal and we will be able to do these projects with a lot less money and probably get them done sooner,” Burckhard said.
Hoverson said he prefers the Legacy Fund remain intact for the day that oil income isn’t there or be used to return money to taxpayers.
Hogue said he voted against a bill that used Legacy Fund dollars to shore up the employee pension program. It is not a Legacy project to support a program benefiting a select group of residents, he said.
Hoverson and Paulson were disappointed that the state didn’t use its flush of money this session to make the Public Employees Retirement System fund fully solvent by eliminating the unfunded liability.
Paulson said the state should have eliminated the unfunded liability to begin switching the pension program to a defined contribution program, such as a 401K.
“We need to stop making promises that we can’t afford, and we need to switch that over to defined contribution,” he said. “Frankly, the analysis that’s been done by the professionals indicates that the younger folks in the plan right now would be better off financially going with defined contribution. We obviously need to keep promises to the people that we’ve made promises to that are still part of the defined benefit plan, but we need to begin to transition to a defined contribution that’s affordable and sustainable.”
Rep. Scott Louser also said he was disappointed with the Senate’s rejection of a pension reform bill.
“This was as close as we got to pension reform in my career. That’s now become a study for the interim,” he said. “”That has to happen next session because we are $1.44 billion in the hole in our pension program in North Dakota. We have to fix that.”