The North Dakota Senate sent a clear message they do not support using the Legacy Fund to eliminate the state income tax when they defeated HB 1530 41-4. The bill had passed the House earlier in this session as the sponsor, Rep. Craig Headland rushed it through the Finance and Tax Committee which he chairs. I wrote about Headland’s rush at the time and provided the audio of his hot-mic moment telling his vice chair to “move a DO PASS and let’s move on!” Instead of moving on from this bad idea after the Senate’s defeat, the House amended the budget of the Tax Department to include this proposal.
A subcommittee of the House Appropriations tasked with working on the budget for the Tax Department added very similar language from the failed bill to the agency budget. These type of policy decisions should not be placed in agency budgets. Nevermind that none of these appropriators had a hearing on the impacts of the bill. On a positive, the subcommittee didn’t break the law and held their meeting open to the public unlike some of their colleagues on another subcommittee dealing with an agency budget.
This move came on day sixty of the eighty day session. Placing this policy language on an agency budget will likely lead to a stalemate between the chambers which will waste time and ultimately tax dollars. And here, we thought these sort of games were to be avoided with the early deal for state employees. I suspect the conference committee will go back and forth for a number of meetings without much give and take because of this amendment. The lines have already been drawn. Don’t be surprised if the Tax Department budget is defeated and the Legislature rushes to place the necessary items in the Office of Management and Budget appropriation on the final day. Again, this move is a complete waste.
Last year, I broke down how the budget mess in North Dakota is due, in no small part, to lawmakers ignoring voters.
On November 4th, 2008 70% of North Dakota voters rejected a reduction in the corporate and individual income tax. In fact, voters in every single legislative district rejected Measure 2 that election. What happened in the years 2009 through 2015 in the North Dakota legislature is a direct cause of the budget shortfall before the 2017 legislature. Legislators and their fiscal irresponsibility are also to blame. Their decisions to ignore the will of the voters in 2008 and dramatically reduce income taxes over the next four legislative sessions while simultaneously increasing spending, and coupled with a 23% oil extraction tax cut have left the state short.
Who has been at the center of all of this leading the charge? Craig Headland. This is nothing more than Headland’s persistence to keep pushing the same narrow focus that was overwhelmingly rejected by North Dakota voters. The new House Majority Leader and seatmate of Headland, Chet Pollert has unfortunately enabled and endorsed this gamesmanship to take place.