MINOT, N.D. — A coalition of interests met in Bismarck recently to discuss a ballot measure — a proposed amendment to the state constitution — which would invest Legacy Fund dollars into an infrastructure loan program for the state.
I’m sure many of you read that sentence and promptly fell asleep, because the nuances of policy behind how we finance things like sewage treatment plants just isn’t very sexy.
It doesn’t rank very high in the pantheon of American political debates.
Bear with me, because this is important.
I was able to finagle a draft copy of the proposed amendment out of one of the attendees, and while the language isn’t finalized, the road they’re on is a good one.
If passed as currently constituted, the amendment would direct the State Investment Board to invest 15 percent of the Legacy Fund into an infrastructure loan program. This program would be available for local governments looking to finance critical infrastructure projects.
What is and is not “critical” would be defined by the Legislature.
The interest rate on these loans could not be higher than 1.5 percent, and their terms could not be longer than 45 years.
I’ve used the word “invest” twice now, rather than “spend,” because this isn’t really spending. We’re talking about Legacy Fund dollars being loaned out and then paid back with interest.
The Legacy Fund is already invested in things like bonds for various projects elsewhere in the country, for which it earns interest. This amendment would only direct some of the Legacy Fund principal toward investment in North Dakota projects, and the only real cost would be interest returns than the Legacy Fund could normally achieve.
If you could even call it a cost, because by loaning ourselves the money we’re also saving ourselves money.
We’re saving on interest payments. That’s the boon in loaning ourselves the money, there’s no sense charging ourselves a lot for using our own money.
We’re saving on administrative costs. Because, again, we’re loaning ourselves money.
We’re also saving on the cost of construction.
When we’re working with ourselves, the bonding can go faster. The money can be delivered faster. Infrastructure projects like water treatment facilities can be built faster.
This constitutional amendment would leverage a percentage of the billions of dollars in the Legacy Fund to help make local infrastructure projects more nimble and more cost efficient.
This can reduce some of the upward pressure on taxes. Including property taxes, which the North Dakota electorate is eternally dissatisfied with. This can help our communities grow better, and smarter.
All without lowering the balance in the Legacy Fund a single penny.
State lawmakers had a bite at this apple earlier this year. State Sen. David Hogue, a Republican from Minot, offered a bill to create something similar to this but it was defeated.
I’m not a fan of the initiated measure process generally, but this idea is potentially game changing for our state. The legislature should have acted. Perhaps now it’s time for the voters to act.
Rob Port, founder of SayAnythingBlog.com, a North Dakota political blog, is a Forum Communications commentator. Listen to his Plain Talk Podcast and follow him on Twitter at @RobPort.