Dorso Column: ND Legislature’s Problem Is To Avoid Being Stuck Holding The Federal Government’s Bag

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The 63rd North Dakota legislature will meet on 12/3/2012 in organizational session. In most years it doesn’t draw much attention, but this year it should be of interest to all of North Dakota. Besides electing legislative leadership, legislators will be assigned to standing committees. Who sits on the appropriations committees of the House and Senate is probably going to be the most critical decision the leadership will have to deal with this session. I make that statement based on the fact that Governor Dalrymple will make a presentation of his budget for the next biennium during those days.

I don’t envy the Governor or his staff at the Office of Management and Budget who have to put the budget together. Some of you may be thinking, how difficult could it be with the state awash in oil money? I have never known of a time when there have there been more variables to take in to account while producing a two year budget that must be balanced at the end of the biennium.

The Governor’s budget is supposed to be a blue print of spending for the next two years. I don’t know how legislative leadership looks at it today, but in my day we took it as the Governor’s priorities list which didn’t always match that of the legislature.

As we used to say, “The governor proposes and we’ll dispose.”

Only the legislature is empowered to spend the tax payer’s dollars. The governor may veto a spending bill but he can’t pass a bill spending the money so he must find common ground with the legislature.

I deal with this issue in my book When Governance Worked, pages 319 thru 328. Rather than rehash those thoughts written over a year ago let me say my fears have come to pass.

As Rob Port pointed out, the state’s budget is made up of three areas of spending. The General Fund appropriations are from unencumbered funds available to the legislature. Special Funds appropriations are from trust funds and other sequestered revenue which can only be spent as called out in the law or the state constitution. Then there are federal funds which are pass-through dollars that can only be used for the purposes spelled out by Congress.

Rob points out that those dollars are 33.9% of the total for this bi-annual budget. That was no surprise to me as for decades legislators generally came to belief that the three types were each a third of the total of the budget. The percentage attached to each fluctuates some but as a rule of thumb it was a good measure. The first time we spent 3 billion dollars I was a legislator and the percentagess were close.

If the reader is interested in a more detailed discussion of the budget process read Chapter 6 of my book.

Back to my fears about this 2013-2014 biannual budget. With Congress meeting in December of 2012 to deal with what is called “the fiscal cliff” who knows what they might do that will affect 1/3 of the state’s General Fund budget? What could be the worst scenario is they cut the money to be sent to the states to administer and fund the myriad of federal programs and entitlements but do not change the administrative laws or eligibility requirements for those that access each program’s funds.

In effect they would leave the individual states holding the bag. Congress saying they are making the cuts may sound good to the voters but the reality might be total hog wash. I don’t put it past them. If they leave it to the bureaucrats in the Federal government to rewrite the rules and the distribution it will be an even bigger mess.

Besides the “fiscal cliff” Congress must also deal with their profligate ways when in March of 2013 they must find a way to raise the debt limit. Each of these coming events may have far reaching consequences for the 1/3 of the budget the legislature has some freedom with, the general fund. We are talking of hundreds of millions of North Dakota dollars.

The turns and twists of how Congress and the President may deal with the states when faced with the current national debt dilemma are almost beyond comprehension.

John Dorso represented District 46 in the North Dakota state legislature from 1985 to 1999 and as served as House Majority Leader from 1994 to 1999. He is also the author of When Governance Worked: It’s Time to Chart a New Course.

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  • sbark

    No problem forseen here…….that is why Measure 2 (property tax elimination) was defeated. The 6 biggest cities in N.Dak and the influx of social service recipients into small town N.Daks can easily control enough votes to push any shortfalls onto N.Dak Agric. land base.

  • camsaure

    Then maybe they should stop spending the general fund monies like they are drunken sailors.

  • Lynn Bergman

    The “fiscal cliff” came about as a result of the actions of the U.S. House of Representatives to curtail excessive federal spending… period. It is NOTHING TO FEAR in comparison to the alternative of an expanding federal government that removes more and more of our individual dignity through Obamaphones, food stamps, farm giveaway programs (yes, North Dakota farmers and their Democrat votes are as much to blame as anyone for big federal spending) and the like.
    We should be showing up at the capital in droves early in 2013 to insist that state legislators REJECT federal funding of all but social security, medicare and dedicated federal funds like federal highway and airport funding. North Dakotans have EARNED their social security, medicare and transportation revenues from the federal government. And we must reject everything we have NOT EARNED and do it NOW!
    We must morally reject all unearned federal funding and the concepts behind them, such as medicaid, federal education funding, Obamacare funding, and other federal funds THAT INCLUDE FEDERAL REGULATIONS AND MANDATES. Instead we must set up our own independent state run agencies to deal with these problems (that are minimal in North Dakota as compared to other parts of the U.S).
    That way, North Dakota will be in a much better position to tell a third and fourth term President Obama to take his economic extortion and stick it where the sun doesn’t shine.
    Wake up North Dakota. The fiscal cliff is nothing compared to the extortion of U.S. industry that is coming in the next four years from our beloved President. And believe me… he will be as beloved for stealing from oil interests and redistributing to his “friends” throughout America as Hoeven and Dalrymple are for doing the same right here in North Dakota.
    The fiscal cliff… not a problem! A vibrant energy industry will bail us out in this decade… if it is allowed by the EPA…
    Socialism that leads to a creeping dictatorship (call the result whatever “ism” you wish to call it, Naziism, Fascism, Communism, Statism, etc.) and the total replacement of our morals, ethics, and values as a nation with a Godless and Dependent Society… now THAT is something we can protect ourselves from by making North Dakota as independent from a creeping dictatorship as is possible!
    If we do not, along with other energy rich states, set ourselves apart as independent fiscal examples for other states to emulate… God help us in the years to come… Not a single American will have anyone or anything to look up to…. we will all just be looking down… at our outstretched palms seeking the daily government dole.

  • Tim Heise

    Thank you Sir for your service and book, which I will purchase.
    Do you (we) think that Bismarck will change? I know washinton dc will not. I have hopes for Bismarck but I am not holding my breath.

    • Lynn Bergman

      Only after all of the “Bismarcks” becomes educated will Washington change. I, too am living life first with a passing interest in the demise of our great nation. No time to hold one’s breath.

  • http://2wheels2lanes1camera.blogspot.com/ Ryderwriter

    re: the worst scenario is they cut the money to be sent to the states to administer and fund the myriad of federal programs

    That’s what happens when a state acts like a local agency of the federal government, or as an employee of the federal government.

  • Lynn Bergman

    New York Times columnist David Brookes insists that the right balance is $2.50 in spending cuts for each $1.50 in tax reform. That is 62.5% spending cuts and 37.5% tax reform, which MAY have worked four years ago instead of kicking the can down the road.
    The Bowles-Simpson plan consisted of 75% spending cuts and 25% tax reform, which MAY have worked two years ago instead of kicking the can down the road.
    On the eve of the so-called “fiscal cliff” Republican House members must be prepared to demand 87.5% spending cuts along with 12.5% tax reform, which MAY work this month.
    Kicking the can down the road is not such a bad idea, however, because the “fiscal cliff ” MAY well represent capitalism’s “last stand” over cradle-to-grave socialism and the totalitarianism that always comes thereafter.
    House Republicans are on the side of “preservation of our union” as the founders intended, just as surely as Lincoln ended slavery. So do not think harshly of House Republicans that stand up against anything but an 87.5% spending cuts and 12.5% tax reform “grand bargain”.
    We can only pray that House Republicans understand that a national period of immense prosperity is looming due to a national energy boom that is beginning and is unprecendented… and also realize that America’s leadership of the world is threatend only by further socialism such as Obamacare, to be followed after year 2016 by a national value added tax that would end “opportunity” in America forever.
    Once the nation realizes that such a boom is emminent, expect socialists to cash in. Republicans in the house…Now is the time to stop socialism, not after it is on a roll…

  • VocalYokel

    Every taxpayer in this country is going to be “Stuck Holding The Federal Government’s Bag”

    • Lianne

      It is too bad that it is ONLY the taxpayers who will be left holding the bag.

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