Measure 3 Would Invest More of North Dakota’s Legacy Fund

Measure 3 on the Nov. 5 ballot would change how much of the Legacy Fund principal can be spent by the Legislature. (Kyle Martin/For the North Dakota Monitor)

(North Dakota Monitor) -A measure that would limit spending of the state’s biggest trust fund in order to increase its investment earnings will go to a public vote this November.

The Legacy Fund was created through a constitutional amendment approved by North Dakota voters in 2010. It’s supported by the state’s oil tax revenue and is intended to be a source of long-term funding for the state. As of June, the fund’s value was nearly $11 billion.

Right now, state lawmakers can spend no more than 15% of the Legacy Fund’s principal in a given biennium. Based on June figures, 15% of the principal would equate to roughly $1.5 billion. The ballot measure would lower this threshold to 5%, or about $500,000, based on current figures.

That 10% makes a big difference, said State Treasurer Thomas Beadle. He said a lot of the Legacy Fund must be invested in low-risk, liquid securities, just in case the state wants to dip into that 15%.

Beadle likened this to keeping money under a mattress as opposed to putting it in a bank account.

“We’re giving up opportunities for growth,” he said. He said if the measure passes, investment earnings on the Legacy Fund would increase significantly.

The rest of the language on the ballot measure wouldn’t change anything about how the Legacy Fund is managed, Beadle said — it would simply amend the constitution to reflect existing state laws.

The measure would define the principal of the Legacy Fund to include transfers and earnings accrued before July 1, 2017, would require the State Investment Board to invest money in the Legacy Fund and require the Office of the State Treasurer to distribute Legacy Fund earnings into a separate earnings fund on July 1 of every odd-numbered year.

The ballot measure stems from a proposed constitutional amendment passed by lawmakers during the 2023 session. The measure had bipartisan support, and cleared both chambers with more than two-thirds support by legislators. There was no testimony in opposition of the bill, according to the Legislature’s website.

Any proposed spending of the principal of the Legacy Fund by the Legislature must receive at least two-thirds majority support from each chamber.

A recent poll of 500 North Dakota voters commissioned by the North Dakota News Cooperative found that 47% were undecided about ballot measure three, the highest percentage of undecided voters of any measure.