This constitutional ballot measure would limit the amount of Legacy Fund principal that lawmakers can spend.
Current policy regarding the state’s oil tax savings account allows lawmakers to spend up to 15% of the Legacy Fund’s principal during a two-year budget cycle. State Treasurer Thomas Beadle calls this cash under the mattress because the state must keep 15% of it in low-risk liquid securities in case the Legislature decides to spend. I likened it to this.
This ballot measure would lower the spending threshold to 5% of principal.
The North Dakota Legislature voted to put it on the ballot in 2023. There was no contrary testimony in Congress.
The text of the measure is as follows:
This constitutional measure would amend and re-enact Section 26 of Article X of the North Dakota Constitution, which relates to expenditures and transfers from the Estate Fund. This measure is intended to reduce the amount of principal available for expenditure every two years and provide clarity on distributions from legacy funds. The proposed amendments would require transfers and gains that occurred before July 1, 2017 to be considered principal in legacy funds. The amount of legacy fund principal that can be disbursed over a two-year period will be reduced from 15 percent to 5 percent. Requires the State Investment Commission to invest funds, not just principal, in legacy funds. and, on July 1 of odd-numbered years, require the State Treasurer to distribute the proceeds of the Legacy Fund to the Legacy Revenue Fund.
With this measure,
Reduces the amount of Legacy Fund principal that Congress can spend from 15% to 5% during a two-year budget cycle. Improve investment opportunities for legacy funds, valued at approximately $11 billion as of June. We define legacy fund principal to include transfers and gains that occurred before July 1, 2017.
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