Awash in tax revenue from North Dakota's latest oil boom, state legislators are asking voters to build a piggy bank of sorts.

On Thursday, the Legislature approved a ballot measure asking voters to add a permanent oil tax trust fund in the state constitution. The measure will appear on the ballot during the November 2008 general election.

In essence, voters are being asked to decide how much leeway their state government should have to spend the extra cash that rolls in during oil boom, the last of which occurred in the early 1980s.

Supporters of limiting this leeway by setting up a constitutionally-mandated trust fund say it will permanently preserve the benefits of a finite resource. Detractors of the ballot measure say that the Legislature has been responsible with oil tax revenue and that there are too many future uncertainties to tie its hands.

Over the last two years, as world oil prices spiked and pump jacks returned to western North Dakota en masse, energy taxes collections have been very kind to the state coffers. During the 2005-07 budgeting period, the state collected $229 million in oil tax revenue, compared to $120 million during the last period and just $43 million 10 years ago.

North Dakota's entire general fund budget is about $2.5 billion.

With a large state surplus boosted by these oil revenues, legislators are giving budget increases to many state departments, spending $82.5 million for a historic increase in K-12 education funding and talking about replacing a state prison from the early 1900s with a new $85 million facility.

The constitutional measure's sponsor, Rep. Dave Weiler, R-Bismarck, said the Legislature must also consider the future.

"This will ensure that future generations of North Dakotans - our children and our children's children - will also have the benefit of revenue from the oil we have today," Weiler said.

He said the revenue could be used to fund education in the future or to make sure there's money available to give state employees a pay raise.

Rep. Jim Kasper, R-Fargo, who co-sponsored the measure, it's irresponsible to be balancing state budgets today with revenue that could disappear tomorrow.

"We have no idea when the spigot is going to shut off or the price (of oil) is going to crash," Kasper said.

Under the permanent trust fund plan, the first $100 million of oil tax revenue that the state collects would go to general revenue, with the balance going to the fund. Starting in 2011, the general fund allocation would rise with inflation.

The idea is for the principal of the trust fund to accumulate while the interest goes to general revenue. In an emergency, a three-fourths vote of the Legislature could access as much as 20 percent of the fund's principal.

Weiler said the overall effect would be an evening out of the amount of oil tax revenue that goes to general revenue each year. During boom years, much of the revenue would go to the trust fund. During bust years, the state would still be able to spend the interest generated from the permanent fund.

"This thing is going to assure that there's oil revenue in good times and bad," Weiler said.

His idea passed 24-21 in the state Senate and 79-12 in the state House. Republicans have majorities in both chambers, but a much larger majority in the House. And although more Democrats than Republicans voted against the measure, there were detractors on both sides.

Rep. Kari Conrad, D-Minot, said it would tie the hands of a Legislature that has shown it can be responsible in spending accumulated oil and gas revenue.

"It's not something that we have just willy nilly taken out and put into the general fund," Conrad said.

Sen. Judy Lee, R-West Fargo, said saving oil money is a good idea, but one that doesn't belong anywhere near the state constitution.

"There's an arrogance to us saying not only that we know what the state is going to need 50 years from now but also that we think we can control future legislatures," Lee said. "I think that's wrong."

She also said a ballot measure on this subject would be asking voters to decide on something that they know little about.

If voters do decide to create the trust fund next year, North Dakota would join a handful of other states with constitutionally-mandated trust funds.

The most famous of these is the Alaska Permanent Fund, an $8 billion collection of oil revenues set aside by a constitutional amendment in 1976. The fund pays a yearly dividend of about $2,000 to most of Alaska's residents.

Alabama and Wyoming also have permanent oil and gas trust funds that help defray the expenses of state government. Utah is considering one this year.

(Reach reporter Jonathan Rivoli at 223-8482 or jonathan.rivoli@;bismarcktribune.com.)