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North Dakota voters have made it clear they want the state’s legacy fund, called the People’s Fund, to invest in the state to grow the economy and create jobs and opportunity.
The latest expression of this strong public preference is in a poll in North Dakota where 68% of voters said investing in legacy funds would be better than the state’s current policy of putting most of their money into out-of-state investments. It shows that you want it to be done internally. Or foreign country.
How much of the $9.8 billion legacy fund is invested in North Dakota?
Under the law, up to $150 million is available for infrastructure loans to local governments. Bank of North Dakota has at least $400 million available for its low-interest loan match program.
There is also a target allocation of up to $600 million for equity investments made through equity funds, venture capital funds, or alternative investment funds, and the funds will be allocated “with a primary strategy of investing in start-up or expanding companies within the state.” ” will be invested.
Sounds good. But how much has been invested in equity investments in the state so far?
The state Investment Commission, which manages the Legacy Fund, has so far allocated $38 million to Chicago-based investment firm 50South Capital, which is investing the money in five out-of-state funds.
The details of how that money will be invested and what benefits North Dakota is expected to receive are not known.
For comparison, legacy funds raise an average of $54 million. per month 12 years.
What we don’t know about these in-state stock investments is that while 84% of voters want the list of investments made by legacy funds to be published online, the State Investment Commission has decided that these details must be kept under open records laws. This is because they claim that they are excluded from the scope of the The public does not have to make a formal records request because it is likely located elsewhere.
One of the fundamental problems is that even though we call legacy funds sovereign wealth funds, we don’t treat them like separate pension funds or insurance funds.
These are completely different investments. Sovereign wealth funds tax public resources (30% of North Dakota’s oil and gas revenues in the case of legacy funds) for the public good.
Sovereign wealth funds recognize that natural resources such as oil and gas are finite, so they are wise to strategically invest their proceeds to build a better future when those resources are depleted.
Unfortunately, North Dakota residents see little tangible results from the Legacy Fund, even though the North Dakota Legislature has withdrawn an average of $500 million every two years since 2019.
Most of that money is used for infrastructure improvements such as flood control, water supplies, roads, and bridges in places like Fargo.
But as the North Dakota poll shows, the Legacy Fund could become a shill for ballot measures that siphon money for things like property tax relief, with 59% of poll respondents in favor and 17% in favor. is against it.
That should set off alarm bells in Bismarck and beyond. It’s clear that North Dakota voters want proof that they are benefiting from legacy funds.
This is a time for strong leadership — Governor Doug Burgum, I hope you’re listening. We do not want to risk wasting legacy funds on expenditures that do not create a better future for our state.
Editorials represent the views of the Forum Management and Editorial Board.
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