Billion Dollar Baby: Investing the Budget Surplus Wisely
North Dakota is fortunate to be looking at a budget surplus in the coming years. The next budget may have over $600 million in extra funding available.
One downside to any surplus, of course, is the howls of despair from the people who want it back. “We’re being overtaxed!” is a common cry, and while the idea behind refunding tax dollars back to the people who paid them sounds good on the surface, in reality it’s unreasonable.
First of all, most of those taxes come from businesses and student loan interest payments, not individuals. Businesses pay taxes to the state, especially multi-national corporations that take lots of money out of our local economies, such as Wal-Mart. Taxes are a way to help equalize what we get back with what we pay in.
Second, North Dakota’s taxes are among the lowest in the country--even the property tax, which most consider the most onerous.
Instead of writing short-term rebate checks, which would disappear into the nether within a few weeks of being written, North Dakotans should focus on how best to invest this surplus to benefit current and future generations. We need to view it as an opportunity, not as a problem.
Two areas where North Dakota can really benefit from a surplus are energy and education. Both represent the future of our state.
Some economists say gasoline will cost over $7 a gallon by this time next year. Ethanol is not helping as much as was hoped because the price of food is now increasing. But there’s a bright side: North Dakota is in a great position to create more and better forms of energy.
Biomass, wind farms, and solar power should be included in the same talks about ethanol and oil drilling. The North Dakota Legislature passed a bill in 2007 to give tax breaks to companies drilling new oil wells. Several bills designed to promote alternative energies did not pass.
We should not make that mistake again. We’ve been through enough booms to know bubbles cannot last. Responsibility, thy name is clean energy.
Imagine the job listings in five, ten, twenty years, if instead of sending young people out west to the oil fields, we sent them all over the state to the wind and solar farms, the clean coal factories, and other high-tech, high-reward positions. It’s possible if we use our budget surplus effectively.
Where would all those smart young people come from? Right here in North Dakota, if we play our cards right. We have a magnificent system of public colleges and universities. Now we just need to make sure the public can afford to attend them. The price of college has steadily risen over the years. The university system even asked for a $250 million increase in funding for the next biennium.
Can we afford to pay that much for education? Can we afford not to pay that much?
Without an educated, young, and talented workforce in North Dakota, those oil jobs (which won’t last forever) will lead to just another bust instead of a prolonged boom. Without the foresight to ensure the people are available to fill those high-tech new-energy jobs, there’s not much point in investing in our state at all.
Besides appropriately funding our state’s higher education system, we can also use the Bank of North Dakota, the only state-owned bank in the country, to help students and their families afford college. Currently, student loan interest payments go into the general fund, adding millions to the surplus.
Several ideas have been passed around the last few years, such as a tuition freeze, student loan forgiveness after a few years of living and working in North Dakota post-graduation, and even making higher education free for all North Dakotans, similar to the way they do it in Norway (government-provided loans and grants) and Sweden (completely funded by taxes).
The bottom line is this: North Dakota has an opportunity and an obligation to use public resources to benefit the public. By improving our education and energy systems, we improve our quality of life, save our state’s wilderness for future generations to enjoy as we have, and create more industry and business opportunities.
If that isn’t more important than getting a hundred dollars or so back in the mail, I’m not sure what is.
Comments
1 month, 2 weeks ago HighPainsBleeder said
Giving back money confiscated from individuals by the state is unreasonable? Nobody loves to spend other people’s money more than the Liberal Lefties. And could you please sight the source of your claim that “most of those taxes come from businesses and student loan interest payments, not individuals”? I don’t believe that for one second. You’ve completely ignored sales tax, alcohol/tobacco taxes, etc. But I do realize you need to make the facts fit your preconceived conclusion. That is that the government know better how to spend my money than I do. We certainly cannot be trusted to do “what is right” with our own money. And yes, I do consider the property taxes to be “onerous”. When I bought my house in 1999, the property taxes were $2000 per year, with two thirds of which went to the schools. Five years later, it was $3200 per year. You appear to believe this is a sustainable trend. What color is the sky on the planet you live on? “Second, North Dakota’s taxes are among the lowest in the country--even the property tax, which most consider the most onerous.” Again, a number apparently pulled directly out of your lower colon region. According to the Microsoft Money website, using data from the 2005 American Community Survey from the U.S. Census Bureau, North Dakota ranks 28th in the list of property tax burdens by state. Hardly makes us “among the lowest”, does it? In fact our neighbors in tax happy Minnesota are better off on property taxes than North Dakotans. I have a friend with a house in Moorhead that is appraised at nearly the same dollar figure as mine, and their property taxes are 50% less annually than mine. You also seem enamored of throwing ever more money at education, with no evidence whatsoever that this money is spent wisely. The same with alternative energy. You blithely scold the legislature for not pumping endless subsidies on unproven, not ready for prime time technologies, that at best would be the barest of band-aids when measured against current and projected energy needs. The Liberal Left is all for energy independence. As long as it doesn’t include nuclear energy, drilling anywhere in or around the United States for oil, mining additional coal, or, god forbid, anyone making a profit from it. I should have guessed you’d have wet dreams about getting US taxes up to the level of Sweden, “Taxes in Sweden consume more than 50 percent of GDP. The aggregate tax burden rose by about 150 percent between 1950 and 1980.” undefined
1 month, 2 weeks ago KevindF said
There is NO state government budget surplus! There IS over taxation of family income and assets!
I can invest my own income.
I can’t afford anymore government “help!”
The greedy, lazy education cabal is out of control in this area!
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