Burgum spikes 'misleading' bill on Legacy budgeting

BISMARCK (AP) — Gov. Doug Burgum vetoed legislation Thursday that would have prevented the state from budgeting earnings from its $6 billion oil tax savings account until they are in hand, saying legislators are trying to make it appear the state has less money than it does.
The veto is the latest flashpoint between Burgum, a moderate Republican, and the more conservative Republican-controlled Legislature.
Burgum wrote in his veto message that the legislation passed on the session’s final day “ignores all generally accepted accounting principles” and “manipulates the recognition of state revenues” to make the general fund appear smaller by hundreds of millions of dollars.
“It misleads legislators tasked with voting on appropriation bills and taxpayers who deserve to know the true financial status of the state,” Burgum wrote.
Senate Majority Leader Rich Wardner said legislative leaders were undecided Thursday whether to call lawmakers back to Bismarck to challenge the veto.
“I don’t know if it’s important enough to waste a day on it,” he said.
The Legislature has power over the budget, not the governor. Wardner said there is strong consensus among lawmakers that future budgets will be set as provided in the legislation, whether or not the veto stands.
Burgum spokesman Mike Nowatzki said he could not speculate on whether that would draw legal challenge.
Wardner defended the idea.
“There is stability in the budget when you have the cash in hand,” he said. “I think a lot of legislators agree to leave (Legacy Fund earnings) alone until you have them.”
Voters approved the Legacy Fund in 2010 as a way to set aside money after North Dakota oil production had entered a new boom period. It requires setting aside 30 percent of state tax revenues on oil and natural gas production in the fund. It currently holds about $6 billion, and has long been a point of contention over how and when the money should be used.
A two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund’s principal, which lawmakers have not yet had the appetite to do.
Earnings from the fund are now put into the general fund, which is spent on an assortment of programs and projects.
Lawmakers used $100 million from Legacy Fund earnings this session to balance the state’s record $14.7 billion, two-year budget that includes federal aid.
Wardner said that was done to “shore up” the state’s treasury after massive cuts to it in recent years due to a slumping economy, which has since rebounded due to strong oil prices and production.
North Dakota’s Constitution gives the governor authority to veto sections of spending bills without vetoing the entire bill.
The legislation vetoed by Burgum was tucked into a budget bill that is typically the last bill passed during a session and acts as a repository for dozens of unrelated proposals.
Burgum previously vetoed two bills during the 2019 session. The Legislature failed to override his veto of a bill that would have raised driver’s license fees for the first time in more than 30 years, but did override his rejection of another that defines the duties of a legislative committee.