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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