BISMARCK — A group of North Dakota Republican lawmakers have released a proposal for issuing $1.1 billion in bonds to pay for economic development and infrastructure enterprises, including flood prevention projects in Fargo and Minot.
Under the plan, presented by Senate Majority Leader Rich Wardner, R-Dickinson, and Rep. Todd Porter, R-Mandan, the state would gather cash by selling 20-year bonds to investors and then repay them at a low rate of interest.
Like competing bonding proposals from Gov. Doug Burgum and Democratic legislators, the Republican lawmakers' plan draws on interest generated by the state's $7.3 billion oil tax savings account, known as the Legacy Fund, to pay back investors.
State lawmakers have historically been leery of issuing bonds to pay for future undertakings, but using the massive Legacy Fund to reimburse investors has warmed some conservatives to the idea. However, Wardner noted, it may take some convincing of skeptics to get the bill through the legislative process.
Porter said the proposal is a "win-win situation" because it creates jobs and helps fund major infrastructural priorities that benefit North Dakotans without reckless borrowing.
The plan carves out millions of dollars for water projects, including at least $132 million over the next four years for the Fargo-Moorhead Area Diversion Project, which aims to mitigate floods of the Red River in the Fargo metro area. Other major funding would go to a project called the Mouse River Flood Protection Plan, which addresses flooding concerns in the Minot area.
Paying the state's share of the expensive projects' funding through bonding measures instead of other budgetary means, Wardner said, would free up funding for smaller water projects in the future.
Other funds in the proposal are earmarked for repairing high-priority roads and bridges across the state. Wardner said the greater availability of infrastructure funding will allow the state to match and accept federal grants when opportunities pop up.
The lawmakers have outlined nearly $171 million in grants to cities and counties for infrastructure projects. The money would make up for oil tax revenue that never arrived because of the hard economic times endured by oil and gas companies over the last year.
Wardner noted that $50 million in the plan would go to carbon capture projects that bolster the coal industry. He said the state needs to maintain coal-fired power plants to meet the energy needs of North Dakotans 20 years down the line.
The plan outlines funding to upgrade the State Hospital in Jamestown and North Dakota State University agriculture building Harris Hall. The proposal also includes funding for agricultural research and technical colleges.
Burgum proposed a $1.25 billion bonding bill during his budget address in December that incorporates many of the same themes as the Republican lawmakers' plan. One major difference is in the delivery of funds to cities and counties — Burgum's plan involves making $700 million available to localities in "legacy loans" that must be repaid, while the lawmakers' proposal leans more heavily toward providing grants.
The lawmakers' grant proposal is expected to be filed as a bill in the state House of Representatives later this week. Wardner said Grand Forks Democratic Rep. Corey Mock is joining a group of Republican legislators in sponsoring the legislation.