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Omdahl: ND’s fiscal mess warrants annual sessions

By Staff | May 5, 2017

The 2017 legislative session has ended, leaving in its wake a more convoluted fiscal system than the one with which it started and causing serious observers to wonder how long this house of cards can stand.

Consisting of specious revenue estimating, funding triggers, and a variety of special funds, state budgeting requires new and better sleight of hand adjustments every session. State finances are an incoherent mess and every session adds a new layer to the shaky pyramid. We talk about running government like a business but no self-respecting business would tolerate this sort of fiscal management.

The villain is not the ineptness of the legislators. To a person, they work hard to know and understand as much about state finances and issues as humanly possible in 80 days.

It’s the institution that is at fault. And the greatest flaw in that institution is the biennial meeting crammed into 80 days. It had a devastating impact on fiscal management in the 2017 session

But that is not new. Fiscal policy in the last few sessions has been driven by the unknowns in the revenue streams. And it isn’t going to get any easier down the road.

As Governor Jack Dalrymple noted when he presented his parting budget on the eve of the newly-seated Assembly in December: “The kinds of price drops experienced by our two major industries of energy and agriculture are best described not as a correction but rather a collapse.” This was not mere rhetoric; the figures prove it.

Because of the volatility of these two industries, legislators are unable to make creditable revenue estimates for a budget that is supposed to serve for a two-year period. And that is not even considering the constant changes originating in Washington that impact state finances.

Because of this uncertainty, the budget makers went on a slashing binge without having time to give serious consideration to re-prioritizing programs. They assumed that all priorities should remain the same even though they were faced with a very different revenue picture.

The state’s fiscal system will be chaotic, and get even more chaotic, as long as legislators hang on to limited biennial sessions.

The only legislator who has addressed this issue in recent years is Rep. Keith Kempenich (R-Bowman) who has proposed to split the one biennial 80-day session into two 40-day annual meetings.

He has been stone-walled because of the fear that, carried to a logical conclusion, annual meetings would lead to a full-time legislature. The reasoning is ridiculous. In fact, the voters have already changed the old 60-day limit to an 80-day system and there has been no move to a full-time legislature since the change was made 40 years ago.

(It is worth noting that anything carried to its logical conclusion becomes illogical. For one thing, it is illogical to think that North Dakota taxpayers are going to put over 140 legislators on the state payroll without a revolution.)

Back in the 1960s, states started moving away from biennial sessions by splitting their biennial sessions into a long regular session one year and a shorter fiscal session the second year. This move makes more sense for North Dakota than for any other state because we are dealing with more revenue volatility than any other state.

Looking back at the chaos of the past four legislative sessions, it seems that the proposal for annual fiscal meetings is an idea long past due. We should have learned at least that much during the past four months.

Omdahl is a former lieutenant governor and former political science professor at UND.

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