VELVA It turns out North Dakotans share similar values when it comes to their vision for their state.
About a dozen people gathered in Velva Wednesday at a public meeting sponsored by the Legacy Fund Initiative to talk about how the state eventually should use the oil and gas money being stored away for the future. Many of the ideas mirrored priorities identified by state residents in 2012 visioning efforts through the U.S. Department of Agriculture’s North Dakota 2.0 and the North Dakota Chamber of Commerce’s North Dakota 2020.
Local residents called for transparency and accountability with the Legacy Fund and use of the money to support education, infrastructure and protection of natural resources and the environment, which tracked proposals that the Legacy Fund Initiative project committee already is considering.
The Great Plains Institute, a St. Paul, Minn., agency with an office in Fargo, is coordinating the Legacy Fund Initiative and scheduled public input meetings in Watford City, Velva, Grand Forks and Lisbon. Maria Effertz-Hanson of Velva and Cody Schuler of Fargo, who are among 24 stakeholders on the initiative’s project committee, attended the Velva meeting.
There was a strong sense at the Velva meeting that the state should be spending its oil money on road improvements, education and other needs and doing so immediately.
“Why are we trying to build this fund when we have so much need for it now?” one participant asked.
Brad Crabtree, vice president for fossil fuels with the Great Plains Institute, said the need to use oil money to address problems now also was a message at the initiative’s Watford City meeting, and it is a concern of the initiative’s project committee. However, the committee believes the state has plenty of oil money not going into the Legacy Fund, including $3.5 billion in other designated funds, that should be tapped first to address these needs, he said. Because some of these funds are constitutionally restricted, voters would need to agree to amend the constitution to release that money.
“Our group may recommend that the state legislators and state policy makers need to take a hard look at all these funds and maybe try to rationalize them and make them function better together,” Crabtree said.
North Dakota voters approved the creation of the Legacy Fund in 2010. Thirty percent of the state’s oil and gas tax collections are mandated for deposit in the fund, and the Legislature has allocated a smaller, additional amount of oil income to also be deposited in the fund. The fund is nearing $2 billion and is projected to exceed $6 billion by 2017, when earnings begin transferring into the state general fund and the principal becomes accessible with a two-thirds vote of the Legislature.
The Legacy Fund Initiative, funded with a grant from the Northwest Area Foundation, launched last November after a state delegation returned from a visit to Norway to examine aspects of its oil industry. Norway has a trust fund that has grown to $875 billion since the 1970s. Discussions with Norwegian officials highlighted the need to develop a plan for using Legacy Fund proceeds early on to avoid conflicts later.
The project committee’s draft plan proposes that the Legacy Fund be managed to provide for the state’s needs when the oil is gone and to provide funds of last resort in times of exceptional need. Reinvesting some of the earnings could help with that.
But the committee also suggests some money be used to take visionary steps to build assets and enhance the quality of life. That could include establishing a scholarship fund for eligible residents attending in-state accredited colleges and universities. Other recommendations include a “genius initiative” to support private and public sector innovation through risk capital and investment in long-term infrastructure, such as high-speed internet, natural gas pipelines, regional water supplies and flood protection.
“We need to be doing some important things now with this money,” Crabtree explained, noting that Watford City residents in their third oil boom supported that idea at the input session there.
“They don’t want a third bust,” he said. “So even though they are very excited about the opportunities that the oil and gas boom is creating for them, they want to make sure they are preparing for other things that can support our economy and support future generations and that we start that now.”