Interim Committee Studies Future of Transportation Funding

This interim, North Dakota lawmakers serving on the Government Finance Committee are discussing how to fund state and local roads in the future. Part of that discussion, includes exploring possible increases to the state’s gas tax and registration fees as well as alternative revenue ideas. The committee meet December 7^th to discuss transportation funding and the future. 

 “The current funding formula is inadequate,” said NDACo Assistant Director Terry Traynor. “The federal funds have essentially been flat over that same time period, clearly, our foundational revenues have not been keeping up with the costs. It is time to explore other funding options to support our transportation system in the near future and long-term.”

County road funding has consisted of property tax, highway distribution funds, and federal highway formula funds and in the most recent years, a great deal of one-time state funding. That one-time funding has been the salvation for county roads with the injection of close to $1 Billion in both oil producing and non-oil producing counties. For about four years, counties have made great strides in addressing the backlog of road and bridge improvement projects.

Traynor highlighted how the one-time investments have made a profound difference across our state. 413 major projects in every county were completed with the one-time funding. The most recent Upper Great Plains Transportation Institute (UGPTI) study shows dramatic improvement in road conditions because of this. The miles of “poor” pavement have been cut in half and the miles of “good” have increased by at least a third.

“But more than the chart, you can see it in the results, and hear it from our local officials,” said Traynor.

Traynor showed committee members examples of what the funding as done from a $1.32 million bridge in Barnes County to a $2.2 million gravel truck route in Ramsey County to a $3.7 million bridge replacement in Stark County.

“The UGPTI study says we should be spending $450-$500 million a biennium on local roads if we want to maintain the improvements made and provide the transportation system necessary for our ag, energy and other industries,” said Traynor. “We are actually spending about 60% of that need, and much of that is on things like snow and ice removal that contribute little to the long-term maintenance of roadways. So obviously we have a challenge.”

North Dakota Department of Transportation officials pointed out that because there was no appropriation for a state funded construction program during the 2017 Legislative Session; North Dakota is solely dependent on federal funds (and the minimal state match) for any road improvements this biennium. Federal funds can only be used on federal roads; which make up 17.65% of all the roads in the state. This makes the state very reliant on federal funds for any construction work.

Traynor pointed out that the Highway Distribution Fund is supplied by motor vehicle taxes and fees. Two-thirds of the revenue is fuel taxes, and one-third vehicle registrations. And unlike in some states, the motor vehicle excise tax does not go into funding roads but into the State’s General Fund.

It has been a number of years since any increases have been made. In 2005, lawmakers approved a 2-cent fuel tax and an across-the-board registration fee increase of $10. In 2009, a $3 registration increase was approved. A 1-cent increase in the gas tax would generate $7.4 million for state, county, city and township roads.

Comparing registration fees with other states in our region, North Dakota is significantly less. Wyoming for example is three times higher, Montana twice as much and South Dakota is similar but has a local option as well, which makes their fees higher than North Dakota.  North Dakota is surrounded by states with higher fuel taxes with the exception of Montana which is similar.

Transportation officials at all levels across the country are exploring additional ways beyond the traditional methods to provide funding for transportation programs as revenue generated by fuel taxes have dropped due to greater vehicle fuel efficiency.

Survey Shows Counties Progress with Zoning for Medical Marijuana

In preparation for Thursday's webinar on medical marijuana
NDACo asked counties: "Where is your county at with respect to zoning for medical marijuana facilities."
46 out of 53 counties responded. As you can see, the progress counties have made in preparing for the implementation of medical marijuana is very split. Many counties indicated they will be tuning into Thursday's webinar to learn more about the best zoning practices for regulating medical marijuana facilities.

We are encouraged to see the volume of county members who have signed up for NDACo's webinar on "Medical Marijuana: Proposed Administrative Rules & Zoning Changes". We hope you consider it as well if you have not already registered for this free educational session.
Register by clicking here:
https://www.ndaco.org/programs_and_services/institute-of-local-government-ilg/ilg-courses/medical-marijuana-propos

ed-administrative-rules-and-zoning-changes/

County Study Group Reviews Proposed Rules for Medical Marijuana

The proposed administrative rules for medical marijuana are comprehensive and lengthy. The 55 rules drafted by the North Dakota Department of Health (DOH) are intended to protect the public’s health and safety while regulating the medical marijuana program. NDACo put together a group of county officials to review the rules. The group represented various departments who will be involved and impacted by the implementation of medical marijuana. 

NDACo legislative team gets input from study group members

Following the initial review of the proposed rules, NDACo will follow up with the Department of Health seeking clarification on a number of the rules. NDACo will prepare comments to submit in person and/or in writing to DOH. The response will represent a state-wide county perspective addressing the various county department concerns. Public hearings will be held in the middle of December and written comments must be submitted by December 26^th.  

NDACo has planned a webinar to review the county-related rules with all county members December 7^th at 10:00. In addition, the webinar will also address possible zoning ordinance changes to assist counties in regulating the medical marijuana manufacturing facilities and dispensaries. McKenzie County Planning Director Jim Talbert has put extensive research into their ordinance and has offered it as a resource for other counties as well.  

Voters last November passed Measure 5, legalizing medical marijuana. The North Dakota Legislature replaced the law with their own version of guidelines which added more controls and limitations to the compassionate care act. The law allows for only two manufacturing facilities and eight distribution centers. Businesses interested in operating a medical marijuana facility or distribution center must have approval from local officials prior to applying for registration with the DOH. Only qualified patients or registered care givers who have a medical marijuana registration card will be legally allowed to purchase and possess medical marijuana. The DOH has said medical marijuana is anticipated to be available to registered qualifying patients within the first quarter of 2019. 

The study group was made up of Cass County Commissioner Chad Peterson; McKenzie County Planner  Jim Talbert; SW District Health Administrator  Sherry Adams; Morton County Tax Director  Linda Morris; McKenzie County State’s Attorney  Chas Neff; Ward County State’s Attorney  Roza Larson; Grant County Sheriff  John Foss; Burleigh County Sheriff’s Department Major  Gary Schafer; Richland County Social Services Director  Kristen Harsbargen; and NDACo Staff Terry Traynor, Aaron Birst, Donnell Preskey and Mary Korsmo. 

Resources for more information: 
Link to Register for NDACo Webinar Medical Marijuana: Administrative Rules & Zoning

PROPOSED Medical Marijuana Administrative Rules

DOH Public Notice/Hearing Schedule

SB 2344 - Medical Marijuana

Counties Anticipate Property Tax Challenges

The following is a Letter to the Editor - written by North Dakota Association of Counties Executive Director, Mark Johnson

It’s that time of year, when the words “property taxes” are a big topic of conversation. It’s that time when your local governments are setting their budgets for 2018 and are making tough budget decisions. Each county, city, school and park board are all setting their budgets based on needs and public support for services.

There are some important changes in the upcoming budget cycle that will impact your property taxes based on legislative actions this past session. Your local decision-makers are taking those changes into consideration. Counties, like state government, are experiencing significant reductions in non-property tax revenues that have been impacted by changes in our state’s economy.

The biggest change for taxpayers however is the loss of the 12 percent state-paid property tax credit. You may recall from your last several property tax statements that there has been a line stating: “Less: 12% state-paid tax credit.” Lawmakers recognized last session that this tax credit was not sustainable for the future with the dramatic reduction in state oil tax revenues, so they repealed it in favor of a smaller but more permanent form of property tax reform. Going forward, the state will fund county social services. We feel this is appropriate because counties have no control over social services. These services and their costs are controlled by federal and state mandates. For that reason, counties do not feel property taxes are the appropriate source of revenue.

This is a two-year pilot project. Over the next two years, counties will not levy for social services and instead those services will be funded with state dollars. Prior to this legislative action, counties were allowed under state code to levy up to 20 mills for social services. Since each county levied a different amount, the amount of property tax relief will differ county-by-county and may not equal what citizens received under the 12 percent property tax buy down plan.

It’s important to recognize the level of property tax relief provided by the Legislature over the last several years. Lawmakers’ actions to fund social services is in addition to the commitment they have made to reduce the property tax burden by funding a greater share of the local cost of education. Together they total $1.3 billion in property tax relief in the next biennium. The tax relief they have passed on to you will be noted on the top of your tax statement.

Local governments make their decisions based on feedback from the public. And that’s very important. Local governments have transparency. You, the public, are notified of their meetings. They are open to anyone, and you receive a notice if they plan to increase any mills to balance the budget. Your voice does matter in this process.

Property taxes fund pretty much every service you depend on at the local level. It is law enforcement protection, jails, local highway and road maintenance, snow removal, elections, fire protection, ambulance, public schools, public health, transit, local parks and recreation, county fairs and so much more.  I hope this information helps you understand your property taxes and the changes that may affect them. 

*This Letter to the Editor was forwarded to North Dakota newspapers

Justice Reinvestment Committee Update

The Justice Reinvestment Committee met Wednesday, September 13^th in Bismarck. This committee is charged with continuing the study of alternatives to incarceration. This effort has been on-going since 2005 and will focus more this interim on behavior health programs for individuals in the criminal justice system. Committee Chairman, Senator Kelly Armstrong opened the day up with an overarching statement. 

 

“I envision us focusing our attention on a more holistic approach of how to deal with the non-violent, addiction related offenders. We need to remember that a majority of these offenders are in county facilities. In anything we develop moving forward we need to make sure we are working with the county sheriffs, jails and state’s attorneys.”

NDACo provided the committee with an update on the inmate population at county correctional facilities. According to a recent jail survey, there were 1548 inmates in county facilities on April 1, 2017. This is down about 200 inmates from the last population survey conducted in 2015. What’s interesting is that in North Dakota, 51% of all inmates are in county facilities; compared to nationally where 32% are in county jails. NDACo also provided lawmakers with a look at the jail expansion projects for 2017. This year, 8 counties will open jail expansions that will bring an additional 886 jail beds online.

NDACo has developed a survey to collect data from the state’s 23 jails operating as grade 1 & 2 facilities (holding inmates for more than 96 hours). The survey has been sent to the facilities and information will be analyzed and shared with the Justice Reinvestment Committee. Committee members have key interest in what counties are doing to identify behavior health needs. Preliminary findings show that 18 counties are screening inmates for behavior health issues; three counties employ Behavior Health Specialists; nine counties have employees assigned to provide medical services to inmates and 10 counties have referred inmates have referred inmates for further assessment based on the results of intake screening. 

Members of the committee also received an update on the numbers of juveniles being incarcerated and the juvenile justice system in North Dakota. It was noted that North Dakota kids are arrested for fewer “violent” crimes compared to national figures. However, arrests for “non-violent” offenses like disorderly conduct, property crime and drugs pushed North Dakota’s overall juvenile crime rate higher. Director of the Juvenile Services Division at the North Dakota Department of Corrections and Rehabilitation (ND DOCR) told committee members that resources are important to create more options to divert kids away from going into the system.

This committee also took initial testimony on a study of the operation, management, standards and supervision of city, county and regional correctional facilities and a possible transition of the supervision of these facilities from ND DOCR to the Attorney General. Local correctional facilities have been under the oversight of DOCR since 1989. Director, Leann Bertsch, provided committee members with a very descriptive list of jail inspection findings and compliance orders that have been issued as a result of those inspections.

“These inspections take a lot of time and effort. It is a regulatory role and we are in the best position to conduct this role. Removing us from this role would adversely impact the safety of inmates in jails,” Bertsch said.

Bertsch told committee members there would be no advantage to transferring the oversight to the attorney general.

No position has been taken on the oversight study by NDACo or its member associations at this time.