BISMARCK — Republican leaders in the North Dakota Legislature have decided to throw out a proposal to issue $1.1 billion in bonds to pay for infrastructure projects, but a marked-down plan is gaining steam.
Senate Majority Leader Rich Wardner said the original proposal he unveiled at a press conference earlier this month will be withdrawn and a more modest package worth nearly $800 million will take its place as the leading contender to land on the governor's desk.
The Dickinson Republican said negotiation between House and Senate Republicans produced the slimmer version, which still includes major funding for the Fargo-Moorhead flood diversion project and other water infrastructure endeavors. However, funding for roads, a new State Hospital in Jamestown and coal-friendly carbon capture projects didn't make the cut. Wardner said he'll work to find funding for roads and carbon capture through other means.
House Majority Leader Chet Pollert, who did not sign on to the first proposal, said bonding should only be used for "long-range projects" and not for operations or services that can be funded through normal budgetary channels. For Republican leaders in the House, water and flood-prevention projects met that description since they could benefit residents 100 years on, Pollert said.
Gov. Doug Burgum brought forth a $1.25 billion bonding proposal in December, and the Democratic-NPL caucus introduced a competing $2 billion bonding bill — both plans are seen as long shots. Burgum's proposal involves making $700 million available to cities and counties in loans, while the Republican lawmakers' plan leans on providing funding as grants.
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Like the first draft of the GOP lawmakers' bonding bill, the new version will draw on interest generated by the state's $7.9 billion oil tax savings account, known as the Legacy Fund, to pay back the 20-year bonds to investors.
State lawmakers have historically been leery of issuing bonds to pay for future undertakings because the practice is often perceived as borrowing money the state doesn't have. But using the massive Legacy Fund to reimburse investors has warmed some conservatives to the idea. Proponents have also noted that interest rates are very low right now, and executing an ambitious bonding plan will only get more expensive in the future.
Both Wardner and Pollert are confident in the recently trimmed proposal, but they say there's still much work to be done.
