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Omdahl: 80-day biennial sessions cause fiscal disarray

By Staff | Jan 20, 2017

North Dakota fiscal affairs are in disarray, primarily because of our clinging to an unworkable 80-day biennial legislative process.

While almost all other states have gone to annual sessions, North Dakota has resisted changing a schedule that has been used since 1889. We have relied on hasty Band-Aids, triggers, interim budget committees and other quick fixes to salvage the outdated biennial session.

Biennial sessions require biennial budgets. The budget being processed in Bismarck won’t take effect until July 1, 2017 and will continue until July 2019. This requires estimating revenue two and a half years into the future.

It is fairly obvious that oil and farm markets have become too volatile for 2-year projections. And because so much of the state budget is being based on the unknown, Governor Doug Burgum and the Legislature are proposing draconian cuts in depression-era budgets.

With biennial revenue estimates a roll of the dice, the Legislature no longer wants to accept the educated guesses of the experts. They now want to do their own estimating, disregarding the fact that they are amateurs in the world economy.

With the Legislature estimating revenue on the starvation side, the prospects of innovation and reinvention are dimmed because innovation and reinvention will require investment today for benefits down the road. We can’t invest when we are more worried about the next quarter than the next generation.

To further confuse the appropriation process, the legislative leadership has moved to take more control of the budget process by proposing its own budget in competition with the executive budget. At a time when the Legislature declares it wants to cut payrolls it is expanding its own by duplicating the executive budget.

Budgeting is a task better left to the executive branch because the executive branch has access to all of the agency input in a timely fashion and can manage the timeline required to put a budget together.

As a former state budget director, I can attest to the fact that budget-building is a year-round function that includes monitoring expenditures, tracking trends and predicting needs. It isn’t a hit-and-run system that can be crammed into an 80-day session that meets every two years.

More importantly, an executive budget balances all needs of the state because the governor is elected by all of the people and has a statewide perspective. On the other hand, the Legislature consists of locals elected by districts who are likely to have a fragmented outlook.

Even though we are a rich state, we are tightening belts because of specious estimates. We are talking about robbing the Bank of North Dakota, draining the anti-cancer tobacco fund, raising taxes on college students, and levying five percent fees on nursing homes.

At the same time, no consideration is being given to asking citizens to give back a share of the big tax breaks we got from the oil revenue. My residential property taxes went down around 25 percent and my low income tax is an embarrassment. We ought to give back some of these oil benefits instead of taxing students and nursing homes.

Apparently, low estimates justify slashing the things that make up the common good. This in a state where the common good is already marginal.

When it comes to reinvention, North Dakota needs to start thinking about its legislative system. Managing fiscal affairs by guess and by golly every two years is no way to run a state in the 21st century.

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