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Special Report: Financing Schemes Put The Legacy Fund In Danger

SB 2330, and the testimony against it, exposes the problems with the way the legislature's been setting up the Legacy Fund to try to do too many things for too many people.

Note: this is a more complex and winding issue to follow than most, which is part of the point of why this approach to state spending is problematic.

Previously, I wrote you about Senate Bill 2196 which is essentially restructuring the way the current loans for the Western Area Water Supply Authority (WAWS) are set up.

North Dakota's Watchdog Update
Senate Passes Latest WAWS Bailout; Admits Failure
Regardez maintenant (7 min) | On Tuesday, the North Dakota State Senate passed SB 2196 which is the latest bailout bill for the Western Area Water Supply. This was fast-tracked out of committee the day testimony was taken. The noteworthy speech on the Senate floor was that of Senator Ron Sorvaag pointing out that the legislature forgave $74 million worth of WAWS loans last session, …
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More recently, it was brought to my attention that Senate Bill 2330 also interacts with WAWS as well as the various infrastructure funds. Currently, the Bank of North Dakota is using the “Legacy Infrastructure Loan Fund” as a backstop if the loans the legislature has directed them to give out go bad, or if other infrastructure and water revolving funds run out of money. (It’s unclear whether the bank has used this option, but clearly, they anticipate the need.)

Essentially, instead of having the Legacy Fund loan out money directly for these loans, the Bank of North Dakota can originate the loans, and sell them as an investment instrument to the Legacy Fund.

One of the…

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North Dakota's Watchdog Update
North Dakota's Watchdog Update
Dustin Gawrylow