What is a Legacy Fund?

We have almost reached the end of the legislative session and don’t know what kind of higher education board suits North Dakota. Neither have we figured out what a “legacy” fund is.

North Dakota has had one for 10 years and no one seems to know what it is. It was created when the Legislature saw gushers of oil – and taxes – pouring out the Bakken around 2008 and wondered how they would control spending with all of this money oozing around.

So they proposed to the people that we build a wall around this excess with a constitutional amendment that protected it from the Legislature. The people didn’t have a clue of what a “legacy fund” was but thought every state should have one and approved it. The fund has grown to $6,000,000,000 and we still don’t know what it is for.

By putting the money in a deep constitutional hole, we saved the Legislature from the embarrassment of appropriating it, but this diversion has created another problem: it needs to be defined before some hare-brained robo caller dazzles us into buying Pacific islands.

Rep. Craig Headland (R-Montpelier) thought a legacy fund was for cutting taxes so proposed that we take half of the Legacy Fund earnings every two years and cut our burdensome income tax.

The Legislature said that wasn’t a legacy idea even though one house passed it before the Governor compared it to Robin Hood’s strategy of taking from the rich and giving to somebody else. Nobody ever audited Robin Hood so we don’t know how much was kept as a management expense.

So the Legislature has told us what the Legacy Fund wasn’t: a tax relief plan.

Then a band of legislators proposed to use the Legacy Fund for infrastructure– highways, airports, culverts and such. Counties and cities in the east were giddy just thinking of pothole-free streets.

The two bigger universities thought that research would create a legacy and asked for $100 million in Legacy funds to look for it. They still don’t understand that this is North Dakota and we never feed the big dogs without throwing a bone or two to the smaller dogs. It preserves our sense of egalitarianism.

So here we are at the end of the legislative session without agreeing on the meaning of “legacy.”

We are at the point when Supreme Court Justice Byron White was asked to define pornography.

“I can’t describe it but I know it when I see it,” he replied.

In an opinion piece written before the session for North Dakota newspapers, Governor Burgum gave us his scope of the Legacy Fund from his perspective:

1. Let the Fund principal grow, using only the interest earnings.

2. Support projects with regional, state or national impact.

3. Leverage funds with partnerships, matching grants, etc.

4. Diversify economy and workforce.

5. Impact beyond present generation.

Regarding his wish that funds be spent for intergenerational impact, the oil upon which the tax is being imposed is not ours alone but belongs as well to following generations. We just happen to be here when allocation of benefits have to be identified.

An income tax cut for this generation would only fatten this generation but would be of little help for children and grandchildren.

Scientific minds tend to think in terms of benefits for humanity rather than geographic parochialism. This raises the question about research funded with Legacy money. Should it be focused on research for humanity or focus on North Dakota?

For more attributes of a legacy, look at the ABM site near Nekoma.