Measure 3 on the Nov. 5 ballot would change how much of the Legacy Fund’s principal can be spent by Congress. (Kyle Martin/North Dakota State Monitor)
(North Dakota Monitor) – A bill that would limit spending in the state’s largest trust fund to increase investment returns will be voted on by the public this November.
The Legacy Fund was created by a constitutional amendment approved by North Dakota voters in 2010. The fund is supported by state oil tax revenues and is intended to be a long-term source of funding for the state. As of June, the fund was valued at nearly $11 billion.
Currently, state legislators cannot spend more than 15% of the Legacy Fund’s principal in any two-year period. Based on June numbers, 15% of the principal amount is equivalent to about $1.5 billion. The ballot measure would lower that threshold to 5%, or about $500,000, based on current numbers.
State Treasurer Thomas Beadle said that 10% makes a big difference. He said more of the legacy funds should be invested in lower-risk liquid securities in case the state wants to drop to that 15%.
Beadle likened this to keeping your money under your mattress instead of putting it in a bank account.
“We are giving up opportunities for growth,” he said. He said the bill, if passed, would significantly increase investment returns for legacy funds.
Beadle said the remaining language in the ballot measure does not change anything about how the Legacy Fund is managed, only amending the Constitution to reflect current state law.
The measure would define the principal amount of the Legacy Fund to include transfers and gains that occurred before July 1, 2017, require the State Investment Commission to invest in the Legacy Fund, and require the State Treasurer to invest in the Legacy Fund. It obliges them to distribute the amount. Separate revenue funds are paid on July 1 of odd-numbered years.
The ballot measure stems from a constitutional amendment passed by lawmakers during the 2023 session. The bill has bipartisan support and passed in both chambers with support from more than two-thirds of members. There was no testimony against the bill, according to the Legislature’s website.
Congressional spending proposals for Legacy Fund principal must receive support from at least a two-thirds majority in each chamber.
A recent poll of 500 North Dakota voters commissioned by the North Dakota News Cooperative found that 47% were undecided about voting method 3, the most undecided of any measure. The percentage of voters was the highest.
