In 2010 North Dakotans approved a constitutional measure to create what is called the Legacy Fund. Under Article X, Section 26 of the North Dakota Constitution, 30% of all state oil revenue derived from oil and gas production and extraction after June 30, 2011 is deposited into the Legacy Fund. No principal or earnings of the fund may be spent until after June 30, 2017. Principal expenditures from the Legacy Fund after 2017 require a two-thirds passing vote of the legislature.
State Treasurer Kelly Schmidt emailed me this morning news of the latest deposit into the fund:
My office will be transferring $44,835,257.70 to the Legacy Fund today bringing the total deposited amount to $351,974,104.91. The first deposit was made in September of 2011….
That’s roughly $352 million deposited in nine months, or an average of just under $40 million per month.
But remember, according to the anti-Measure two activists, if we can’t abolish property taxes or towns will burn for want of fire fighters or something.
A lot of conservatives advocated for the Legacy Fund back when it was put on the statewide ballot by the legislature. I opposed it, arguing that locking up these excess funds in government would only hamper the case for tax relief. Turns we critics who made that argument were right. These funds now aren’t available, and make the case for tax relief. Even setting Measure 2 aside, this is hundreds of millions of dollars that could be displacing tax burdens carried by North Dakota’s citizens.
This is going to be an obstacle to any sort of tax relief, be it property taxes or income taxes or otherwise.
What a mistake.