Governor Burgum Is Right to Continue Calling Out Legislature Over Revenue Transparency

We see debates over spending in politics all the time. How much should we spend? Where should we spend it? It’s about 90 percent of what our government does.

More rare are debates over how the government accounts for its revenues, yet that’s a topic Governor Doug Burgum dug into this legislative session (I’m sorry, the pun was right there) at one point calling lawmakers “disingenuous” because they were hiding state revenues.

Now that the session is over Burgum, to his credit, is continuing to harp on the issue. Here are comments he made to the editorial board of the Minot Daily News recently, pointing out that the Legislature’s habit of routing revenues such as those from oil taxes or the Legacy Fund around the state’s general fund is misleading:

Burgum said by depriving the general fund of a direct appropriation, legislators disguise the state’s financial position during the budget process, adding that often it’s legislative leaders hiding information from other legislators.

“So there’s a purposeful approach to try to suggest that there’s no money through the whole session, and then at the last minute, we were able to somehow transfer in the exact amount to cover it,” he said. “That’s the part where we feel it’s less transparent than it should be, because both the appropriators should know what the financial position is as they’re making appropriation decisions and taxpayers should be able to easily understand what that is. This masks some of that.”

Burgum offered a similar argument for his veto of a section of the Office of Management and Budget bill in which legislators determined Legacy Fund earnings deposited at the end of a biennium can’t be spent until the following biennium. He said budgets should treat Legacy Fund estimated earnings as income in the biennium received, just like all other sources of income. Legislators also used a forecast showing only $100 million in Legacy earnings going forward when the amount this biennium is estimated to exceed $400 million, he said.

“That was like the disappearing Legacy earnings,” Burgum said. “It wasn’t just conservative. It was manipulative – to suggest that there wasn’t enough revenue.

“This matters to us about transparency and how we run government because we think it affects decisions,” he added. “With more transparency, at the last day we might have passed on-time funding, which would have really helped all of our growing school districts and communities and workforce.”

This may seem a bit arcane to you readers, so think of the state’s general fund as a sort of checkbook register. The state’s revenues are deposits, while appropriations are withdrawals. We’re supposed to be able to look at the general fund and get an accurate picture of the state’s accounting. How much money do we have to spend? How much has spending gone up or down?

Only, lawmakers like to play games with the general fund. They’ll keep revenues in other funds so that it seems as though the state has less money than it does. Sometimes they’ll appropriate directly out of those other funds, hiding it from an accounting of general fund spending.

What Burgum wants is for the general fund to act as a clearing house for pretty much all state revenues and appropriations. He says this would be more transparent.

He’s right.

We all have differing opinions and priorities when it comes to government spending. That debate, as I noted at the beginning of this post, is the bulk of what politics is. But that debate should be informed by an accurate accounting of the state’s resources.

How can we make sound policy decisions about spending (and taxes, for that matter) if the revenue and expenditure picture is murky?