Posted 2/10/15 (Tue)
By Neal A. Shipman
There is absolutely nothing wrong with saving for the future. For generations, parents have preached that message to their children.
Saving for the future by creating so called “rainy day” funds is a valuable lesson not only to learn, but to follow. By tucking away a few dollars here and there, or whenever you come into a small windfall, you are saving yourself the agony of having to make tough financial decisions when you fall on less than fortunate economic times.
And the North Dakota Legislature and the people of this state have learned that lesson well. The state of North Dakota has been through some tough financial times in the not too distant past when former oil booms went bust, and the state’s farming and ranching economy weren’t as robust as we would have liked. Those were hard days for the North Dakota Legislature. It is hard to look your constituents in the eye and explain why the state doesn’t have enough money flowing into the General Fund to spend on education, social programs, or to adequately fund other essential services.
So, no one can blame the states’s residents nor the Legislature for plowing billions of dollars of oil revenue into several “rainy day” funds to help get North Dakota through any unforeseeable rough time in future years. One of those “rainy days” funds is the Legacy Fund, which has a balance of over $2 billion today and is still growing, while the state also has two other such “rainy day” funds that are also growing.
The question that needs to be asked is, “Is now a good time for the state to tap into these ‘rainy day’ funds to help meet the infrastructure needs of the oil-impacted region of western North Dakota?”
Obviously, the Legacy Fund, which receives 30 percent of all oil and gas production and extraction tax revenue, is untouchable until June 30, 2017.
But that doesn’t mean that the Legislature shouldn’t consider tapping into its other “rainy day” funds to help meet the demands in places like Watford City and McKenzie County, which are at the epicenter of the oil impact.
“Rainy day” funds do no good if they are simply savings accounts that are never used.
The time is right for the North Dakota Legislature to ensure that their pledges, as well as the Governor’s, to make things right in the oil patch counties is met this legislative session. If that means tapping into the “rainy day” funds to meet those promises, then so be it.
After all, that is why those funds were created.