BISMARCK — The North Dakota Legislature will convene Tuesday, Jan. 5, in Bismarck amid a global health crisis and an economic slump that have put the state on uneasy footing.
The 141 members of the House and Senate haven't convened for a regular legislative session in two years, and ideas are flowing on how to balance the state's books and use its massive oil tax savings account, known as the Legacy Fund. Republicans enter the session with a strong supermajority in both chambers, as well as every statewide office.
Leaders from both parties agree that the state budget and a bonding bill will be the session's headliners, but Legislative Council Director John Bjornson said there will be plenty of other issues before lawmakers. He expects that legislators will introduce more than 800 bills and resolutions in the first month of the roughly four-month session.
The economic troubles that came with the COVID-19 pandemic, including a collapse of oil prices, have dampened projections for state tax revenue. As a result, lawmakers will probably have to make some "strategic cuts" to the budget, said Senate Majority Leader Rich Wardner, R-Dickinson.
Wardner said legislators will likely lean on rainy day funds and earnings from the voter-approved Legacy Fund to settle the books, though he noted that some money may come back to the state's purse from agencies that received millions of dollars in federal pandemic relief.
Republican Gov. Doug Burgum presented a proposed $15 billion budget to lawmakers in December that relies on reserves to "hold the line" on general fund spending, which mostly goes to education and human services. Burgum said his plan would not raise taxes, though it makes small cuts to higher education.
House Majority Leader Chet Pollert, R-Carrington, said he wants to make sure "we aren't going backwards" on funding for K-12 education. The state has taken on a greater proportion of K-12 spending in recent years as more revenue from the Oil Patch has come in.
The overall goal, Pollert said, is to make sure the state spends responsibly without overreaching.
The governor and leaders from both parties all agree on one thing: It's the right time for a bonding bill.
During his budget address, Burgum unveiled a proposal to issue $1.25 billion in bonds to carve out money for infrastructure projects. Under the plan, the state would gather cash by selling bonds to investors and then repay them at a low rate of interest.
State lawmakers have historically been leery of issuing bonds to pay for future undertakings, but Wardner said he's working on a Republican bonding proposal that would come in around $1 billion. Democrats are working on a bonding plan of their own, said House Minority Leader Josh Boschee, D-Fargo.
All of the plans draw on interest generated by the $7.9 billion Legacy Fund to pay back investors. Wardner said there's some urgency in passing a bonding bill this session because interest rates are very low, and the cost of borrowing money will almost certainly go up.
Wardner said there's a lot of common ground in the competing proposals, including a heavy emphasis on funding infrastructural improvements like the Fargo-Moorhead flood diversion project. He added that he believes lawmakers will come up with a solid proposal that can "set the table for the future," but he noted that some Republicans who are dubious of bonding will have to be brought on board.
Boschee said the Democratic proposal shares an idea with Burgum's plan to establish a "revolving loan" fund for cities and counties to draw upon for infrastructure projects. The Fargo Democrat added that he'd like to see funding for schools and low-income housing in the bonding bill.
Beyond bonding, lawmakers will look to cement parameters and plans for spending the interest that comes off the Legacy Fund. In recent years, the fund has been used to fill in gaps in the budget, but Wardner said lawmakers must provide confidence "that the Legacy Fund is working for the people of North Dakota."
Wardner said his preference would be to use some of the interest to invest in research, behavioral health and other forward-looking priorities, while still putting a conservative amount back into the fund. He added that using the funding to keep the coal industry afloat will be one of his main concerns.
Boschee said "the pandemic has shone a bright light on the cracks of our community," and the state should get creative in using Legacy Fund earnings to curb homelessness, diversify the economy and prop up child care.
The strained relationship between Burgum and the Legislature will inevitably be an underlying theme of the session, said Pollert and Boschee.
Many lawmakers were upset by Burgum's heavy involvement as a political donor in legislative races, including a controversial effort to unseat powerful House Appropriations Chairman Jeff Delzer, R-Underwood. Others, including Pollert and Boschee, believe Burgum has wielded too much power during the pandemic through executive orders and big funding decisions.
Leaders from both parties acknowledged that lawmakers will attempt to limit the governor's authority during emergency situations. Such a bill could call the Legislature into session more frequently during an emergency or allow lawmakers to have a say on extending executive orders, Pollert said.
Boschee said Democrats would be supportive of efforts to put guardrails between the executive and legislative branches. He said his party values its relationship with Burgum, noting that their disagreements are usually related to policy. Boschee added that he expects the differences between Burgum and Republican lawmakers will be more emotional in nature because of the drawn-out fight over Delzer's seat and Burgum's perceived overstepping in campaign matters.
Burgum spokesman Mike Nowatzki said the governor is aware of the plans to limit his office's authority from media reports, but he does not have a stated position on the issue. Nowatzki added that Burgum has a "strong working relationship" with lawmakers.
"There’s always a natural push and pull between the executive and legislative branches, and this year will be no different," Nowatzki said.