Oct 26, 2008 - 04:05:19 CDT
Of the four ballot measures appearing before voters this fall, Measures 1 and 2 have generated their fair share of controversy.The measures give the people of North Dakota the power to reduce their income taxes in half as well as lock up millions of dollars in oil revenue into a new trust fund.
Ad campaigns in support and opposition to both have flooded North Dakota airwaves. Legislators have proposed alternative bills to Measure 1, urging voters to vote no on Nov. 4. And Washington-based think tanks have focused their attention on Measure 2, publishing arguments for and against it.
At the center of both measures is the state's oil boom and the sudden wealth it has given the state.
Supporters of Measure 1, which would establish a more restricted state oil trust fund, say it's time to put more money aside to save for the future. Measure 2 supporters say the state government has become bloated with oil revenue - thanks to a projected $1.2 billion surplus. They say it's time to give some of it back to taxpayers.
But opposition to the measures has been vocal and from high-ranking political figures, including Gov. John Hoeven and many legislators. They say if both measures pass, state government will lose hundreds of millions of dollars, making it harder to invest in things such as road repair and property tax relief.
State Rep. Al Carlson, R-Fargo, who is seeking the position of House majority leader next session and doesn't support Measure 1, said if both measures pass, the Legislature could be in for a contentious session.
"If Measure 1 and Measure 2 pass, it'll be a different picture for revenue," Carlson said. "Then the priorities will change."
Measure 1
As oil revenue continues to pour into state coffers, lawmakers in 2007 agreed to put Measure 1 on the ballot to stash more of it for future generations before the oil boom North Dakota is enjoying dries up.
Measure 1 would amend the North Dakota Constitution to create the Permanent Oil Trust Fund. The state already has an oil trust fund, also known as the Permanent Oil Trust Fund, which is expected to grow to about $600 million by June 30 next year.
The general fund currently gets $71 million from oil revenue every two years while the rest goes to the standing trust fund. Lawmakers spent about $145 million from that trust fund last session, said Office of Management and Budget Director Pam Sharp.
Add both of those up, legislators got more than $200 million from oil revenue in 2007. Measure 1 would change that.
If it passes the general fund gets $100 million from oil revenue plus any interest earned off the principle in the new trust fund.
Eighty percent of the money going to the fund would be off limits from the Legislature. The remaining 20 percent would be available to lawmakers, but it would require 75 percent of them to agree to access it.
Under the current trust fund lawmakers need a simple majority to access the money.
Supporters of Measure 1 say it's a necessary move to shore up funds to soften the blow of another bust cycle that could follow the state's oil boom. Opponents say it ties lawmakers' hands, locking away money that could be used for state investments.
Sen. Tracy Potter, D-Bismarck, and Kathy Hawken, R-Fargo, introduced a plan earlier this month that would hinge the amount of money going into the general fund based on a percentage rather than a hard figure, asking voters to forgo the new oil trust fund this time around.
Rep. Dave Weiler, R-Bismarck, who introduced the language for Measure 1 in the 2007 session, said voters shouldn't wait another two years to establish a more restricted oil trust fund.
"We can argue about the details all day long," he said. "The only thing they object to is they cannot get their hands on the money that is coming into the state."
Rep. Rick Berg, R-Fargo, said he doesn't think Measure 1, if it passes, will have a big effect on the Legislature next session.
"What it will do is it will preserve these oil revenues for future generations," Berg said. "Measure 1 is critical to prevent our state from falling back into the trap we did in the 1980s."
But groups opposing the measure say it will hamper investments in a state that already prides itself on penny-pinching legislators.
Measure 2
If passed, Measure 2 would reduce income taxes by 50 percent and corporate income taxes by 15 percent, but opponents say the measure isn't focusing on the tax relief North Dakotans want: property taxes.
The state tax department has estimated that Measure 2 would cost the government about $415 million in tax revenue, but supporters of the measure say it's the right thing to do in light of a growing budget surplus estimated to be $1.2 billion.
Opponents, including the governor, legislators and many groups that are telling voters to vote no on Measures 1 and 2, say the ballot initiative threatens to cut funding for school, roads and property tax relief.
If Measure 2 passes Hoeven said he would not propose a plan to cut property taxes.
"They have a choice," Hoeven said. "If they vote for Measure 2, then all their tax relief is going to be income tax relief."
Washington-based think tanks have argued for and against the measure.
The Center on Budget and Policy Priorities said the tax cuts would benefit the wealthiest people in the state the most and could hurt future investments into programs such as education and road repair.
Meanwhile, the Washington-based Tax Foundation said in a recent report that North Dakota has seen an increase in government spending while state income has grown from oil revenues, suggesting the government could afford a tax cut on the scale of Measure 2.
Supporters of Measure 2 also ran into controversy after mistakes were discovered in the measure's language.
Those mistakes would cut the income tax in one bracket by 45 percent and some income in two other brackets wouldn't be taxed at all.
The tax department has estimated that the mistakes would affect 325 taxpayers. Legislators have agreed to submit language next session to fix the mistakes if the measure passes on Nov. 4.
Secretary of State Al Jaeger agreed to change the language that will appear on the Nov. 4 ballot to reflect the mistakes, drawing the ire of Americans for Prosperity who made the mistakes in the first place.
Americans for Prosperity sponsored the ballot measure.
Also on the ballot:
Measure 3
Measure 3 would direct new money coming in from the 1999 tobacco settlement into an anti-smoking program for North Dakotans.
Currently, 90 percent of the money from the tobacco settlement is used for the Water Development Trust Fund and Common Schools Trust Fund. The rest goes to heath programs.
North Dakota will start receiving an extra $15 million next year as part of the 1999 tobacco settlement, which would be used to fund Measure 3's anti-smoking program. Supporters say the health care savings from an anti-smoking campaign would save the state $13 million.
Opponents say Measure 3 would take money away from the water and school trust funds.
Measure 4
If passed this fall, Measure 4 would give the governor the ability to hire or fire the director of the Workforce Safety and Insurance among other changes.
It also would require WSI to use the Office of Administrative Hearings, bar WSI from rejecting decisions from administrative law judges and returns WSI employees back into the state classified system.
WSI has come under intense scrutiny in recent years, and this measure was introduced by injured workers who contend the board of directors running WSI have done a poor job since departing from the governor's oversight in 1997.
(Reach reporter Brian Duggan at 223-8482 or brian.duggan@bismarcktribune.com)
College Kid wrote on Oct 26, 2008 9:47 PM:
CollegeStudent wrote on Oct 26, 2008 9:11 PM:
When issues such as Measures 1 and 2 pose such a threat to college faculty, staff, and students (as they do in the way of tuition increases and funding), I think it is the right of faculty, staff, and students to voice their opinions. Vote "NO" on Measures 1 and 2! "
TimTim wrote on Oct 26, 2008 11:58 AM:
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