February 4th, 2016

In 2009, the legislature suspended a traditional $60m per biennium transfer from Bank of North Dakota profits to the general fund - after 4 legislative sessions of that suspension that amounts to $240 million - nearly 1/4th of the current general fund shortfall.

After the announcement on Monday that the state budget would have a $1 billion shortfall and require 4.05% across the board spending cuts, as well as draining the "Rainy Day" Budget Stabilization fund by 80%, many people are looking for solutions.

One solution that many people have forgotten about is the state owned Bank of North Dakota, and the fact that in 2009 the legislature suspending a transfer of profits that had been $60 million per biennium prior to 2009.

The suspension of that transfer at that time was actually a very good idea pushed by then-Senate Majority Leader Bob Stenehjem in order to prevent the legislature from spending it all.

That suspension was held in place during the 2011, 2013, and current 2015 sessions.

During this time period, the annual profits of the Bank of North Dakota have increased from $61 million in 2009 to $130.7 million in 2015.

The Bank of North Dakota has done very well in the last 6 years. The legislature wisely block its self from being able to spent profits from the bank during that time - but now, with the state facing a shortfall, what is happening?

The Bank of North Dakota - a state government entity - is expanding its size, scope, and even physical footprint with a new $17 million building in Bismarck.

While every other government agency is looking at cuts and surplus trust fund are being drained, the state owned bank which according to the Bank's own history was created to offset taxes and state spending.

In the same spirit that inspired Bob Stenehjem to keep these dollars out of legislative hands in the first place, this Forgotten Surplus at the Bank of North Dakota should be used to replenish the Budget Stabilization Fund so that the 2017 legislature is not tempted to use the Legacy Fund to bail themselves out if the current downturn lasts longer than they hope.

-Dustin Gawrylow, Managing Director

North Dakota Watchdog Network