North Dakota Gov. Doug Burgum hopeful Legislature works quickly to distribute CTE funds
Burgum suggests borrowing the money immediately “on Day 1” of the upcoming legislative session, then distributing checks to the waiting projects so they can get going
GRAND FORKS – North Dakota Gov. Doug Burgum said he is hopeful the Legislature will work quickly to distribute funds so planned career and technical education centers in the state can begin building in the 2023 construction season.
This comes as more than a dozen schools across North Dakota are waiting for a combined $68.3 million in federal funding needed to build the centers, which the governor, school officials and economic development leaders across the state believe will someday help ease North Dakota’s workforce shortage. In March, 13 projects were awarded grants of up to $10 million for CTE centers, but the federal funding behind the state grants has not yet been approved by the U.S. Department of Treasury.
Meanwhile, inflation continues to push up the costs of the stalled projects. The longer they wait to break ground, the more expensive they’ll be, and now the funding – a combination of those federal/state grants and local fundraising – won’t cover the original costs.
“We don’t want to miss another construction season,” Burgum told the Grand Forks Herald. “We’ve already agreed on it. We’ve already appropriated the money, it’s just if the feds are holding it up and we have a way of managing cash to work around it. Let’s do it quickly.”
Burgum suggests borrowing the money immediately “on Day 1” of the upcoming legislative session, then distributing checks to the waiting projects so they can get going. The Legislature convenes on Jan. 3.
The holdup comes as the federal government questions whether the promised dollars can actually be used for technical education projects. Burgum said “it was clear in our reading of the federal guidelines that these (projects) could qualify,” but the U.S. Treasury Department has since said “we’re not sure about these CTE things.”
“We’re having this debate back and forth and they’re just not approving it,” he said.
Burgum said the state must borrow the necessary funds from the Bank of North Dakota and send checks to the various projects. Then, he said, “we’ll continue to battle with the feds.”
And if the federal government someday officially declares the funds can’t be used for CTE centers, “we’ll go replace that $78 million in the budget with what can spend it on and then use general funds to pay back the bank.”
“We’re going to get the money from the feds, but it may be for a purpose different than this. Something we’re doing will qualify for that federal money,” he said.
Included in the upcoming budget is $40 million to distribute to the various projects to account for rising inflationary costs that have accrued while the projects remain in limbo.
The Career Impact Academy in Grand Forks is one of the CTE projects that has been delayed. The slow progress on the project comes after a local fundraising campaign that quickly raised $11 million, from nearly 70 companies and a handful of individuals. Local funds were required before any of the North Dakota projects could qualify for state dollars.
The location for the Grand Forks CIA will be near the intersection of Gateway Drive and I-29.
Grand Forks Region Economic Development Corp. President and CEO Keith Lund said he is grateful for past and future state support.
“We wouldn’t be talking about the Career Impact Academy today if it weren’t for the financial support provided through the 2021 special legislative session,” Lund said. “We were very pleased to learn that Governor Burgum is suggesting the Bank of North Dakota advance funding to North Dakota school districts so that CTE center projects can have financial certainty moving into 2023.”
Lund said it’s possible the project could break ground this summer, provided the needed state funds come early in the year.
The Coronavirus Career and Technical Education Capital Projects Grant promised more than $88 million to CTE projects across the state. A portion of the total was $20 million from the state’s allocation of American Rescue Plan funding, which has already been awarded to projects in Dickinson, Watford City and Minot.
The delayed $68.3 million was applied for at a federal level through the Department of Treasury’s Coronavirus Capital Projects Plan. The program has a primary focus on funding for broadband infrastructure, but funds can also be used for other capital projects like multipurpose community facilities for work, education and health care monitoring with remote options.
In August, the Department of Treasury approved $45 million for broadband infrastructure in North Dakota, but the Department of CTE is still waiting to hear back on funding for the CTE centers.
The delays are proving costly. As reported in past Herald coverage , the Grand Forks CIA project could cost 6% more than originally expected due to inflation.
Considering that, Lund said he is excited about the governor’s proposal of $40 million to address those rising inflationary costs.
“There isn’t a CTE center in North Dakota that can build the project they proposed at the end of 2021 with the budget they developed at that time,” Lund said.
The final decision on the proposed bank loan, however, is a decision for the Legislature.
“They would have to approve the additional appropriation and the bank loan. But there is such strong support for CTE. … I don’t think there is political resistance to the CTE,” Burgum said. “Everybody knows it’s part of the workforce issue.”