Dalrymple's State Of The State

If you missed Governor Jack Dalrymple’s State of the State address today, you should be able to catch the archive here, and the gov’s press release is below. You can fast forward through about the first 30 minutes of nonsense.

Only in government does it take 30 minutes to usher people into a room and sit down. Seriously, it was like a church service. It started with a prayer. People sang hymns. Committees were convened to walk people into the room. It’s a shining example of how government makes even the simplest of tasks soul-suckingly arduous, and why government should be kept to doing as little as possible.

Anyway, here were some of my reactions to the Governor’s speech from today:

Minimizing The Oil Boom

Dalrymple noted that his office gets calls from the national media at least once a week, and he enjoys telling them that North Dakota’s economic success is about more than the oil boom because unemployment is low across the state. Dalrymple, and Governor Hoeven before him, have always been sensitive to the idea that their success in governance has more to do with circumstance than policy. This is absurd. It’s not the relentless growth in state spending under Hoeven and Dalrymple that has made ND great. It’s not their economic development schemes. It’s the fact that North Dakota has oil, and coal and has enjoyed several good years in the agriculture industry.

Would that we had elected officials with the humility to admit as much. It’s easy to govern when you’ve got the goose that lays the golden eggs.

Property Taxes

One of the most eyebrow-raising moments in the whole address, to my mind, was Dalrymple’s insistence (apparently aimed at worried local officials) that the hundreds of millions of dollars he wants in “property tax relief” (more like “local government bailouts”) won’t restrain local entities from raising property taxes again if they want to.

What Dalrymple is saying is that, even though he’s buying down the mills with hundreds of millions of state dollars, local government should feel free to go ahead and raise those mills again if they feel they need to.

And you know they’ll feel they need to. Which means that all we’re doing is shifting a huge amount of local spending to the state level so that local governments can raise local spending again. This isn’t tax relief. This is a shell game.

Housing Incentive Fund

In his executive budget address Dalrymple called for raising the tax credit subsidies for contributions to the Housing Inventive Fund to $30 million (double the mark the fund barely hit last year), and for the legislature to dump another $20 million in general fund appropriations into the fund. Given that the tax credits obviate tax burdens for those contributing to the fund, the burden for the entire $50 million Dalrymple is calling for to subsidize low income housing development falls on the backs of the taxpayers.

I don’t think property developers in ND need subsidies. What we need to do to ease housing pressures, and lower rents, is facilitate the building of more housing period. And not through subsidies, but rather through the lowering of taxation and easing of red tape and regulations.

Run Away Spending

Dalrymple must be feeling sensitive to accusations of being a spendthrift, because he took some time in his speech to specifically address that criticism. He noted that many North Dakotans are observing the fiscal crisis in Washington DC, and are worried about something similar happening in North Dakota. “It has not and will not happen here,” said the governor. Of course, that’s an easy thing to say when the oil boom is pumping billions into state coffers. What happens if there’s a shift in the oil markets? Or the federal government institutes some disastrous new regulations? Over the last decade North Dakota has grown government spending at a rate faster than the federal government. What happens if the revenues fueling that growth go away?

There’s no easy answer, which is no doubt why Dalrymple wants to be out in front of criticism.

Student Loan Debt

Dalrymple’s budget calls for big increases in higher ed budgets. That’s no surprise. But it was interesting to hear Dalrymple address the national student loan bubble directly in his speech. What is unfortunate is that Dalrymple called for addressing student debt by asking the legislature to consider upping appropriations for scholarships. Of course, government subsidizing higher education is exactly why higher ed costs are out of control in the first place. Kudos for Dalrymple for at least acknowledging that there’s a bubble in higher ed, but he’s got a ways to go on this issue.

Conservation Program

Dalrymple has re-iterated his call for the creation of an independent conservation board funded with oil tax revenues. Dalrymple says that the outdoors are a “core element in our North Dakota quality of life.” He’s not wrong; North Dakotans love the outdoors. That being said, the legislature shouldn’t look kindly on calls for them to delegate their legislative authority to a board of appointed bureaucrats who, in turn, would be free to give some of their windfall of oil revenues to non-profit groups, many of which have a very questionable environmental agenda. Dalrymple’s proposal would put the State Industrial Commission in charge of approving the board’s actions, and cap the amount of revenues the board would receive, but it seems to me that if we’re going to use tax dollars for conservation the elected representatives of the people ought to make that call.

Unfortunately, word from inside Dalrymple’s administration is that they’re trying to get ahead of another push behind an initiated measure to create this board. They’re probably right to be fearful. The people behind the measure have deep pocket. They spent $145,000 on collecting signatures to put the measure on the November 2012 ballot, and were only derailed by signature fraud committed by a group of NDSU football players. Dalrymple’s proposal is marginally better than what the conservation groups are pushing (they want no cap on revenues, and no oversight from any elected officials in state government), but it’s a bad idea no matter how you slice it.