Legislative leaders update: CARES Act, BND and special session
Although legislative interim committees have been postponed over the last month due to the coronavirus, your legislative leaders have been working closely with Governor Burgum and Lt. Governor Sanford to ensure that the citizens of North Dakota have the resources and support they need to emerge from this challenge in the best possible position. We have appreciated the valuable information our legislators have gathered from their constituents regarding the needs and concerns from all corners of the state. Your voices are being heard and we thank you. Your perseverance and dedication to your neighbors and communities is what North Dakota is all about.
In these unprecedented times, we’ve already seen our state step up in many ways. North Dakota has processed a record number of unemployment benefits, extended the income tax filing deadline, and expanded unemployment insurance eligibility. The Governor has removed red tape wherever necessary in order to make government work efficiently for its citizens, while closing only those businesses necessary to slow the spread of the virus. Many people have been working diligently to develop innovative ways to improve and expand testing and make sure the most vulnerable in our state are protected. Local governments are working with businesses to ease restrictions and provide distance learning programs for students. Private industry has also risen to the challenge through innovation in order to provide critical services, while local lenders have worked strenuously to provide PPP dollars to our state’s small businesses.
The federal government has provided assistance as well. Last week we received guidance on how the $1.25 billion CARES Act dollars allocated to North Dakota can be spent. The good news is that the federal government gave the state broad discretion to use the money as it deems necessary to respond to the local coronavirus impact and related economic shortfall. This allows the legislature and other leaders to determine the best use of these dollars for North Dakota in a matter that rejects a “one size fits all” approach. One major concern was being able to replenish the state’s unemployment insurance fund, which has paid out over $100 million. Thankfully, the federal dollars can be used to refill these funds if needed.
In addition, the Bank of North Dakota last week announced two new loan programs designed to fill the gaps in the federal PPP that exist for small and large businesses. The Small Employer Loan Fund (SELF) is a one-percent loan option through local lenders modeled after the Rebuilder’s Loan Program after the 2011 floods in our state. The Covid19 PACE Recovery Program (CPRP) is for larger employers to access long-term, low-interest loans for working capital and cash flow. The Budget Section plans to authorize BND to utilize $200 million of the state’s CARES Act dollars to buy down the interest on these loans without the need for a community match. Legislative leaders provided key insight on the development of these programs and will continue to provide input as these loan programs are implemented. We are fortunate to be the only state in the nation with a state bank that can provide such low-interest loans.
Some have asked if we intend to call a special session to address the COVID-19 response and other budgetary concerns. The truth is, calling a special session right now would be premature and a misuse of taxpayer dollars. We have not yet seen the full impact from PPP or EIDL payments, nor have we received guidance on the CARES Act agriculture assistance program. In addition, many of the concerns related to COVID-19 are already being addressed at the state and local levels in ways that do not require legislative action. For example, the BND loan program is a way the state is responding to gaps in federal funding that falls fully within the authority of the Bank.
From a state budgeting perspective, we do not yet have a full picture on sales tax revenue impacts, which is a key indicator of the state’s overall economy. Nor do we have stable oil prices with which to make budgetary projections. All of this information should be much clearer by the time we prepare for the regular session in December. Any additional spending or adjustments that require approval in the meantime can be addressed by the interim Budget Section, which is the norm during every interim. Special sessions are best reserved for defined issues that can be addressed with adequate information and ample time for discussion, which is not the case at the present time.
We are proud of North Dakotans coming together during these unprecedented times and we stand ready for the work ahead. With grit, determination and smart leadership, we will get through this together and emerge as a stronger and more united North Dakota.