We might think the state of North Dakota spends way too much money, but there are leaders in the appropriations committee who are fiscally responsible and are looking for ways to give money back to the taxpayers of the state.
In this episode of Straight Talk, your host, Emmery Mehlhoff visits with the chairman of House Appropriations, Rep. Don Vigesaa, who has also been a strong friend of NDFB for many years.
Representative Vigesaa shares more about the appropriations process and some of the unique situations that legislators addressed this year due to the unrelenting winter weather and much more, and still balance the state's budget.
Reach Rep. Vigesaa: dwvigesaa@ndlegis.gov
Read Emmery Mehlhoff: emmery@ndfb.org
Learn more about NDFB's policy positions at ndfb.org/policy
We might think the state of North Dakota spends way too much money, but there are leaders in the appropriations committee who are fiscally responsible and are looking for ways to give money back to the taxpayers of the state.
In this episode of Straight Talk, your host, Emmery Mehlhoff visits with the chairman of House Appropriations, Rep. Don Vigesaa, who has also been a strong friend of NDFB for many years.
Representative Vigesaa shares more about the appropriations process and some of the unique situations that legislators addressed this year due to the unrelenting winter weather and much more, and still balance the state's budget.
Reach Rep. Vigesaa: dwvigesaa@ndlegis.gov
Read Emmery Mehlhoff: emmery@ndfb.org
Learn more about NDFB's policy positions at ndfb.org/policy
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[00:11] Emmery Mehlhoff: Welcome to Straight talk with NDFB. This is your host Emmery Mehlhoff. In today's episode, I visit with Representative Don Vigesaa from Cooperstown, North Dakota. Representative Vigessa has been in the Legislature since two 2003 and is the new chairman of the House Appropriations Committee. The North Dakota Legislature is mandated in the North Dakota Constitution to balance the budget. Join me as I visit with Representative Vigesaa about how the North Dakota Legislature is funding agencies, projects and providing tax relief to North Dakota citizens. Join me for this conversation.
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[00:53] Emmery: Well, welcome. Today I am at the North Dakota Capitol and I'm visiting in person with Representative Don Vigesaa. Representative Vigesaa is now the Chairman of the House Appropriations Committee. Representative Vigessa, can you tell us about yourself and your district?
[01:11] Rep. Don Vigesaa: Sure, Emmery. I'm from Cooperstown and we were district 23 up until the redistricting, and now we are district 29, and so our territory changed a bit. So district 29 now encompasses all of Nelson, Griggs, Steele, and Foster counties and then a good share of Stutsman County, most of the rural part of the county and a little bit of the western part of Jamestown. So it's a very large district area wise, because you needed to have about 16,500 residents in every legislative district. So when you get out into the central part of the state, it ends up being a pretty big area to get that many people. So great bunch of folks that I represent. And Cooperstown is kind of right in the middle of the district, north to south, so it's a good spot to be.
[02:06] Emmery: That's awesome. You represent a lot of our rural area and you've been a great friend for the North Dakota Farm Bureau for several years now.
[02:16] Rep. Vigesaa: Oh, thank you, Emmery.
[02:18] Emmery: So let's walk through some of this appropriations process. This is your first time as chairman of the House Appropriations Committee. Can you walk us through how the budget process works?
[02:29] Rep. Vigesaa: Well, I guess the bottom line is we have to leave here with a balanced budget.
[02:35] Emmery:Constitutionally, right?
[02:36] Rep. Vigesaa: Yeah! That's our primary responsibility. But I've been on appropriations for four sessions ahead of this, so I've gotten the experience and I was in the government operations section. So the House Appropriations has 23 members. We're divided into three groups and each of the groups takes on a certain amount of the budgets within state government. And of course, as the overall chair, I oversee the activities of all of the sections. So we have a great team, very good team. And so they work on their budgets and then they add the amendments to whatever they're going to do with a particular budget. And then each section will bring their amendments to the full committee and then we vote it out as a full committee, give final approval to the budgets. So it's a big job. Our members go through every budget very thoroughly and try to prioritize the requests and the spending that is requested and how many FTEs should the department have. So it's a lot of work and so I'm proud of the group and we've gotten all our budgets out of our committee now, so now they've all been to the floor and now they're in conference committee. And of course, normally there's not total agreement between what the Senate and the House did. And so that's what the conference committees are for, is to work out those differences.
[04:08] Emmery: So when you begin session, you receive a revenue forecast telling you how much money is going to come into the state from the different areas and then how do you decide how to appropriate that money? You obviously receive requests from the agencies and then you have a recommendation made by the governor for how much you should spend and where you should put it. And then obviously you have the priorities of both the House and the Senate. So can you tell us about how that process works?
[04:45] Rep. Vigesaa: Sure. At the very beginning of the session we adopt a revenue forecast. And we have two firms, nationally recognized firms, that come in and give us their recommendation on what our revenues will be for the upcoming biennium, the '23-25 biennium. And so after we've gotten all that information from those two firms, then we decide, as both the Senate and the House Joint Committee decides, what to establish for our forecasted revenue.
And so we take a look primarily at the four types of taxes that we collect. That's motor vehicle excise tax, income tax, personal income tax from corporations, and then sales tax. So we use the projections there. And then we also forecast the price of oil that we think will have over the next two years and also the amount of oil that's produced. And so that gives us the revenue that we'll be expecting over those two years. So that's what we use as the amount of funding that we can allocate.
Now the governor puts forth a recommendation for each agency of which the type of spending that he is recommending. We have the base budget from last time and that's where we start from. So we have the base budget, but then we have the governor's recommendation and then each house works on those budgets in the first half and we decide where we think the legislative appropriation should be. But we do take into consideration what the governor has recommended. And as I mentioned, very rarely do the Senate and the House's ideas line up perfectly and that's why we're in conference committee now.
I might add though, too, in March we have another look at the forecast because then we're two months into the session, we have two months more of data and so we give a revised forecast, which will be the final forecast that we'll work with. And we did adjust it a little bit. We were going to expect a little more revenue than we thought on the tax side, but then on the oil revenue, we actually reduced, but we think the price of oil will be in the second half of the biennium. So we reduced our projections a bit on oil and gas revenue. But overall North Dakota is in really good shape economically, so we have a very nice source of revenue coming in from economic activity.
[07:21] Emmery: So you did the first half of the budget process in the first half of session, but when you got to the crossover time, I believe you had to make some significant changes to the budgets that you were proposing in both the House and the Senate. Is that because there was a drop in the amount of revenue that was forecasted?
[07:43] Rep. Don Vigesaa: Well, actually Emmery, we actually were going to see a slight increase, a little bit less on the oil and gas possibly, but a little bit more in the general tax revenues. But at Crossover, which is half time basically after the Senate had done their budgets and the House had done our budgets, we were upside down by over a billion dollars. So in other words, we had overspent our revenue by a billion. And that's not unusual because neither house really knows what the other is doing. And we came into this session with an abundance of excess revenue. We had approximately two and a half billion dollars of additional revenue above the forecast for this current biennium. So in no fault of anybody, but the ideas really flowed for how to use those additional dollars and we overdid it a little bit. So starting in March when we came back after Crossover, we had to do not cutting but reducing the increases to try to get that billion dollar upside down balance to a positive balance. And we've got about a week left and we just are coming to the completion of putting a tax relief package together and we were kind of waiting for that because a lot of other budgets were hinging on that.
We're definitely going to balance the budget because we have to, but it looks like we're going to be able to do that. And then we also have another fund called the SIIF. We call it but it's Strategic Improvement and Investment Fund and there's a balance in there currently, so I think we're going to be fine. Now. Did everybody get their ideas funded? No, absolutely not. But that was probably one of the bigger jobs we had this time was to prioritize because there's a lot of great ideas but only so much money and we had to make some tough choices.
[09:49] Emmery: Tell me about those priorities. You are still in the conference committee process and so you're still ironing a few details out about a few budgets. But are there any specific priorities that you have set this session or projects that the state is going to fund or different infrastructure things? And also what does the tax relief situation look like?
[10:13] Rep. Don Vigesaa: Well, the tax relief we'll talk about that first, because I think one of the things coming in that our caucus definitely felt the need to return some taxpayer dollars to the citizens because when you come in with that much additional revenue, it's the people's money, so it should go back. So the end of the day, we're going to have some income tax relief. We're also going to have some property tax relief, and we're going to expand the Homestead Tax Credit, which is a current program, but we're going to make it a little more open so more people could qualify. The total relief package is going to be somewhere between 500 million and 550 million dollars, which will be going back to the citizens in the next biennium. And so that affects our revenues, obviously. And so we had to make our appropriations adjustments necessary to be able to afford that relief package and to be able to sustain it into the next bienniums. So that was a big priority for us was to get the tax relief package complete.
And then as far as, like other projects, infrastructure, there's several capital projects on campuses around the state. So we're going to do some authorize some funding for some new facilities. One that I know your listeners would be very interested in is Waldron Hall on NDSU. I toured that last fall and I was just shocked at the condition of that facility and facilities. I'm thinking, "Wow, world class research comes out of this facility." I said, "Wow, these people are fantastic." So we have funded new construction for Waldron Hall, and that'll be a great addition to the NDSU campus. And we did some other buildings as well, sprinkled around the state.
We're also very close to deciding that we're going to go ahead and build the new women's prison. Currently that's in New England, North Dakota, and it's gotten to the point where we really need to provide a better space for female inmates. And it's about $130 million project, and I think we're probably going to be able to do that. And that would be built right outside of Mandan, North Dakota, here. So that's a big project.
And then there's lots of other projects that are going to have a great impact across the state. Of course, we do a lot of funding for roads and bridges. We're actually going to do a couple of things that I think are going to be really helpful for townships. We had the prairie dog bill, and I think people are familiar with the prairie dog bill, and that's money that would go to townships and counties if there's sufficient oil revenue, but never really knew for sure if that was going to come to fruition every two years. So we've got a bill, and we call it the streams bill, but it's money that comes from earnings off the Legacy Fund. And there is designation in there that would send $100 million from the Legacy Fund earnings every biennium and it would be split between the state and the counties and cities and townships. And the townships would be getting through that process, I believe it's another $10 million on top of their normal distribution that they get. So townships would see a minimum of like 23 and a half million dollars of funding every two years. So that gives predictability. They can plan. They know the money is going to come in and that'll be great. The prairie dog would be in addition to that too. So if oil and gas revenues are sufficient, they'd get approximately another $9,000 a township. So I think we've done some good things for counties and townships this time.
[14:14] Emmery: That township piece is significant. I know on my way this morning, I drove on one of those township roads and it was a bit of a nexperience as I hit all the ruts in the road that were created just from the really rough winter that we have had. I know a lot of the state has had significant impact to their roads and infrastructure just because of all the snow and snow removal process and just all of that that's happened. And so really excited to hear about that infrastructure component because those roads are, some people say there's not a lot of people that drive on them, but they are a significant piece of the rural economy because of just all of the agriculture business that happens out on those roads. I know those improvements made to those rural roads will have a significant impact on our members out there.
[15:13] Rep. Don Vigesaa: One thing we did too, earlier in the session, we provided some snow removal emergency grant monies for relief there, because we know that certain parts of the state had way more snow than what's a normal winter. So we allocated $20 million in assistance to counties and townships and cities. If their budget went 150% over their average over the last four years, then we would provide 60% of that overage from state funds. And I know that's going to come into play in many of our areas where they just had way more snow than their average budget could handle. So I was really pleased that we could get that funding out.
[16:00] Emmery: Especially after such a hard winter. Well, thank you Representative Vigesaa for taking time to visit with me in this last week, hopefully of our legislative session. And thank you for just taking time out of the craziness to sit down with me. We could probably talk about state budgeting process all day, about all of the things that go into it and then also addressing things like tax reform and addressing things like property tax reform and other things that are important to members out there. But maybe we will have to sit down sometime in the interim to do that. So thanks again for visiting with me and for representing rural North Dakota.
[16:54] Rep. Don Vigesaa: Emmery, it's always good to talk to you. Thank you for providing this service -- this podcast -- to your listeners because it's a good way to catch up on what's going on out here in Bismarck. We're anxious to be done. We've got about a week to go, more or less, so anxious to get back home and get back to my real life. So thank you again for doing the interview with me.
[17:15] Emmery: As I reflect on today's podcast, I was thinking about how rare it is to have the chairman of the Appropriations Committee be from a rural area. Representative Vigesaa is from Cooperstown, which is a small town in the middle of North Dakota, and I think that's a really rare thing and something we take for granted. And we often complain about how much money the state spends and obviously there is some overspending that happens. But I think we should be very thankful that there is a lot of rural and agricultural representation in North Dakota. And if you get a chance to see one of the legislators, thank them and thank them for working hard for North Dakota, for working hard for you. And we might not always agree all the time, but it is significant to be represented because that is just not the case in so many states across the nation. And so with that, you've been listening to Straight Talk with NDFB. If you'd like to learn more about the legislation North Dakota Farm Bureau has been tracking this session, visit us at ndfb.org. Join us next time as we recap the successes and disappointments of this session.
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