North Dakota Legacy Fund Hits $841 Million In Deposits

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State Treasurer Kelly Schmidt sent me some numbers this morning for North Dakota’s Legacy Fund, in which her office will be making another deposit later today. A total of $79,273,665.40 is being deposited into the Legacy Fund for February.

The balance for the fund is at $841,777,629.66. This chart shows the growth in the fund since the first deposit in September of 2011:

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The fund continues to accumulate money, and to date state leaders haven’t really figured out a long-term investment strategy. The legislature won’t be able to spend the dollars until 2017, but the amendment to the state constitution mandating the fund states “The state investment board shall invest the principal of the North Dakota legacy fund.”

Right now the funds aren’t invested very aggressively. According to the most recent report from the State Investment Board, the fund has earned a 1.13% rate of return in the 2013 fiscal year through the end of December.

You really have to question the wisdom of taking so much money out of the private sector to have it sitting around in state government doing so little. Those funds could be invested in bonding public works projects in the state (I wrote about that here), removing the pressure to pay for those projects up front and freeing up funds for substantial tax relief, but I guess our elected leaders would rather to do nothing with the money than something.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • headward

    Have they shored up the pension for the state and started to phase that out complete?

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      Those of us in the private sector are guaranteeing the day-to-day value of these accounts; they can never decline in value.

      • headward

        That’s what I’m afraid of this fund being used for.

  • justahick

    I am really glad the people of the state chose to develop this fund. I agree the return should be larger, your idea of using it as part of a bonding function has merit and should be investigated.

  • John_Wayne_American

    could you get the numbers from Fong’s office in how much game and fish tax dollars have been collected on the sale of guns and ammo since Nov. 6th?

  • John_Wayne_American

    that is the money they should be using for student loans, school bonds city bonds for road improvements, any use like that,

    This could save the district’s, cities, students buying the bonds or loans a percent and gain the fund an extra percent

  • Tim Heise

    1 % return holy crap that is bad. I am getting 13% and I am investing in North Dakota publicly traded companies IRET, MDU etc. If the return is lower then inflation we’re losing money.

    • John_Wayne_American

      they could loan it to students at 6% and if 1/4 of them default they would still make more money than 1% loan it to them for 5% if they stay in the state, move out, it jumps to 8%

  • camsaure

    Yeah, It works about as well as social security, If we would have invested that money ourselves it would have grown a lot better of returns. Same thing if we were to keep more of OUR tax dollars.

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