The supports of the initiated measure which created the state’s Legacy Fund, some of them quite conservative, insisted that locking away oil tax revenues into this fund would be a good idea because it would make it difficult for legislators to spend it. I found this a little hard to believe. Almost all appropriations bills passed by the legislature garnered more than the super-majority required to spend money out of the Legacy Fund.
Besides, the best way to keep the government from spending our tax dollars is to lock those tax dollars away in the pockets of tax payers.
But we have the Legacy Fund now, and not surprisingly the legislators want to explore new and exciting ways to spend all the loot, including a new entitlement program for higher education. Which is just what we need as the country faces a national problem with a higher education bubble.
BISMARCK, N.D. (AP) – A North Dakota lawmaker says the state’s oil trust fund could have $1 billion by June 2013.
Mandan Sen. Dwight Cook says the Legislature should open a public discussion of how the “Legacy Fund” money should be used. …
Cook says he likes Wyoming’s idea of using the money for college scholarships for North Dakota high school graduates. But he says all options should be discussed.
Cook says he plans to introduce a resolution in the 2013 Legislature asking for a study of how the oil trust money should be used.
Legislators can’t start spending the fund’s money until 2017, but they want to start planning for that now.
The idea of emulating Wyoming’s higher ed entitlement program has been floated by Democrat gubernatorial candidate Ryan Taylor too, but it’s something North Dakota ought to avoid like the plague. The scholarships are supposed to help higher education be more affordable for the state’s students, but the problem with spiraling higher education costs has everything to do with endless government subsidies for tuition.
Just as federal housing policies inflated demand for subprime mortgages, state/federal subsidies for higher education have inflated demand for subprime student loans and degrees.
A much better use for the Legacy Fund, since we’re stuck with it, would be to use it as a fund to bond public works projects. Lend the money to political subdivisions for their road projects and the like, with the political subdivisions paying back the issued bonds with interest, and redirect the appropriations those bonds replace into tax relief.