Republicans Announce $280 million Infrastructure Funding Package

Message from NDACo Executive Director, Terry Traynor regarding Republican Legislative Leaders $280 Million Infrastructure Funding Package

As many of you may know, numerous Republican legislators unveiled a major infrastructure funding plan Thursday. This proposal shows great promise and addresses many of the concerns we have been hearing from you for several years. NDACo was allowed to have input in this proposal, which looks like it has, at this time, great legislative support.

 

This plan would put in place a long-term funding mechanism for transportation; which is something we have worked extremely hard to advocate for. The news release below details the plan and the spreadsheet illustrates an example of how the new dollars could be allocated for “non-oil producing” counties (which are those with less than $5 million in GPT revenue).   The plan, as you will see, is based on the total (paved, gravel & bridge) needs of each county as determined through the UGPTI study.  The proposal also contains some adjustments to the way GPT revenues flow to those larger producers.

 

Assuming this legislation would pass, the funds likely wouldn’t hit the threshold to be distributed until late 2020. We look forward to hearing from you on this plan and developing our strategies to ensure support for infrastructure funding as we near the 2019 Legislative Session.

--- News Release below ---

Republican Legislative Leaders Propose a $280 Million Infrastructure Funding Package

Statewide funding will target cities, counties and townships

Bismarck- ND- House Majority Leader Al Carlson (R- Fargo) and Senate Majority Leader Rich Wardner (R-Dickinson) today proposed a $280 million infrastructure funding package that will provide critically needing infrastructure improvements across the entire state. While funding to oil and gas producing counties and hub cities will continue, the new package would specifically target non-oil producing counties.

“The Legislature has focused many infrastructure spending priorities over the six years to the oil producing counties, and while that money was needed and well spent, this new package will focus on reducing the local tax burden so that non-oil counties can share in the benefits,” said House Majority Leader Carlson.

“This package takes a new approach to funding these needed projects across the state and is not solely based on oil price and oil production,” explains Senate Majority Leader Wardner. “We want to make sure we have a formula that is a stable way for your community leaders to plan now and in the future.”

Here’s how the new package would look:

• Creates three new “buckets” in the state funding mechanism from oil taxes
  • $115 million County/Township Infrastructure Fund
  • $115 million Municipal Infrastructure Fund
  • $50 Million Airport Infrastructure Fund

The Municipal Fund and the County/Township Fund “buckets” fill simultaneously. The Airport Infrastructure funding would only begin once the aforementioned buckets have filled.

Here’s how the funds would get allocated to communities:

• County/Township Fund ($115 million):
  • Excludes the 9 largest oil and gas producing counties
  • Provides $10,000 per township outside of the nine oil counties (capped at $15 million)
  • Remaining $100 million distributed to remaining counties based on needs determined by the Upper Great Plans Transportation Institute
• Municipal Infrastructure Fund ($115 million)
  • Provides $30 million in base funding to communities with a population over 1,000 to be paid out once $30 million is reached.
  • Remaining $85 million will be paid when filled once based on:
    • A funding formula based on a previous year’s census, a 3-year average of population growth and a 3-year average of taxable valuation change
• Airport Infrastructure Fund ($50 million)
  • Awards grants to be administered by the North Dakota Aeronautics Commission

Legislative leaders are also discussing the possibility of using Legacy Fund earnings to expand the existing infrastructure loan program.

VIDEO: Update Provided on Social Service Redesign Project

North Dakota Department of Human Services Executive Director, Chris Jones, provided a half hour update on the Social Services Redesign project with an audience of county social
services staff from Burleigh and Morton Counties. 
As the idea was to do this presentation for county social services staff and
county officials across the state, the presentation and the question and answer
session that followed were recorded and are now available as a You Tube
video.  With the Q&A it is 52 minutes long, but is well worth the time to gain a better understanding of what is being explored and the progress that has been made.

Majority of ND Counties Lowering Property Taxes According to ND Tax Dept. Report

A large majority of counties are collecting less from taxpayers in 2018. That was the statement NDACo’s Government Affairs Specialist, Donnell Preskey, provided to the interim Taxation Committee during their recent meeting. The committee is studying the property tax system. They dedicated several hours to take an in-depth look at how property taxes have increased or decreased since 2015.

“The volume of counties that are showing double digit decreases in levies should be reassuring to legislators that our counties are good stewards of taxpayer’s dollars,” said Preskey. “The state funds used to relieve the local tax burden of paying for county social services had a positive impact on taxpayers across the state.”

The North Dakota Tax Department provided a report to committee members that highlighted property tax mill levy information for tax years 2015, 2016 and 2017 for counties, cities, schools and parks. The information excluded new growth. Less than half of the 50 largest cities, schools and park districts in the state reduced property taxes.

Preskey said, “Forty-seven of the 53 counties did what you, the legislature, expected of them, lowering levies which decreased what they collected from taxpayers in 2017.”

NDACo was asked to provide information on counties who had the most dramatic increases or decreases in property tax collections. It is evident that each county has a unique mix of revenues that vary from year to year, and their ability to manage those reserves can be impacted greatly by a natural disaster, a rare facility construction, or, in a small county, something as minor as a couple lengthy incarcerations. Clearly, the volatility of energy revenues for western counties and the impact of state aid for the smaller counties are the largest and most commonly cited factors for counties that are outliers either to the positive or negative.  Click here to view NDACo analysis of county "outliers"

 

NDACo was also asked to provide information to the committee regarding counties use of social media. This request was in response to a prior committee discussion suggesting a bill be drafted to “require political subdivisions that have a Facebook page to post on the Facebook page any assessment or budget notices required to be published in the newspaper. This would be in addition to the requirement to publish notices in the newspaper.”

Preskey acknowledged the value of using social media in communicating with citizens but recognized how singling out one social media platform and naming it in code could be dangerous with how fast the social media world and applications are changing.

 

In addition, while 47 of our 53 counties have a Facebook page, these pages are managed by various county departments. For example, many counties have an emergency management Facebook page or a sheriff’s department page, but not a general county Facebook page.  In some cases, counties have multiple Facebook pages for specific departments.  Click here to see a list of counties social media platforms.

 

“We would oppose such a proposal as a requirement. More than likely, if a county has a Facebook page, they are using it already as a resource to reach their citizens. There is no need to make this a mandate,” Preskey testified.

 

The interim Judiciary Committee is studying notice requirements with the intent of reducing some of the notices, this proposal would be a move in the opposite direction. NDACo provided that committee with a list of 142 various notices, documents and listings which counties are required to publish as mandated by state law and identified five areas worth review.  Chairman Hogue has drafted a bill that would eliminate some notice requirements or allow for them to be completed in another manner such as posted on county websites. The committee reviewed the bill draft in April but did not take action.

NDDOT Exploring Fee Increases

The North Dakota Department of Transportation (NDDOT) announced it will be proposing an increase in driver’s license and motor vehicle fees. Deputy Director Mark Nelson shared with members of the Interim Government Finance committee that the NDDOT has been directed by Governor Doug Burgum to move forward on a proposal for the 2019 Legislative Session.

Fees for driver’s licenses and vehicle registration have not been changed for numerous years. The driver’s license fees are $15 for 6 years, a fee that has stayed static since 1987. The registration fees were last adjusted in 2005. The fees are set by legislative approval. Adjustments to the fees have been discussed in past years, however, Nelson says prior Executive Branches never felt the time was right to make an increase.

The driver’s license and registration fees at their current level are costing the state $2.45 million a year. The NDDOT presented examples of how the fees can be adjusted to allow for the fees to be revenue neutral. For example, a $26 increase for a Class D license (the most popular license) would cover the cost to break even. This would be a total cost of $41 every six years.  

The fees generated through driver’s license operations are deposited into the State Highway Fund; accordingly for every dollar of costs incurred in excess of revenues generated, there is one dollar less that is available to spend on transportation by NDDOT.

In addition, the costs to cover the Motor Vehicle Division are far greater than the revenue. The state is $11 million away from breaking even every year. To adjust the registration fees so that they are revenue neutral, a $10 increase would be necessary.

Every dollar of cost incurred by Motor Vehicle is one dollar that does not go into the Highway Tax Distribution Fund and is therefore not available to fund transportation. The chart shows Highway Distribution Fund Allocations with the numbers in red illustrating how each area loses funding to cover costs totaling $11 million per year next biennium.

As you can see by the chart, if a proposal to adjust fees so that the costs for motor vehicle revenue neutral, counties could see an increase of $2.4 million in transportation funds.

Utah OMB Director Shares Expertise on Social Service Redesign Project

 Utah OMB Director Kristen Cox spoke Tuesday (5/1) to members involved in the Social Service Redesign project in North Dakota. Kristen has extensive experience in implementing programs throughout state government that focus on increasing efficiency and effectiveness. She has seen remarkable results in both client outcomes and cost savings for state agencies.


The day-long workshop on Operational Excellence in Government provided participants with an approach they can use as the state moves forward in complying with SB 2206 the redesign of Social Services.

Cox provided a summary of her day-long presentation and can be viewed here: https://youtu.be/x7n2hviGflE

Prairie Public also aired a story on her presentation. http://news.prairiepublic.org/post/change-going-utah-omb-director-tells-social-service-personnel-nd

NDACo Asked to Testify on Justice Reinvestment Impacts to Counties

NDACo was asked to speak to the interim Justice Reinvestment Committee regarding reactions to the Justice Reinvestment initiatives that were rolled out in a series of bills passed in the 2017 Legislative Session that addressed reducing incarceration; primarily at the state level. Aaron Birst drew from his conversations with State's Attorneys on the impacts of the legislation. He told the committee the reduced sentences have worked well and have not been too problematic. However the presumptive probation legislation has created some issues for prosecutors. This law mandates most first time C Felony offenders must only receive probation instead of any prison/jail time.

"County prosecutors 100% support Justice Reinvestment. The $7 million budgeted for community programs in 2017 is just not enough," said Birst. "Prosecutors are also very concerned about proposed budget cuts that Governor Doug Burgum suggested when he released his budget guidelines to state agencies last week. In particular, counties believe funding cuts to the juvenile court system would be detrimental." 

As a follow up, NDACo informed the committee about the establishment of the County Working Group on Justice Reinvestment that recently held a session to identify potential concepts or models that any county in the state could implement as alternatives to jail. The working group was made up of 22 county officials from across the state and from various county capacities including: Sheriffs, Commissioners, Jail Administrators, State's Attorneys, a Social Service Director, Public Health director and a County Administrator.

The working group was set up to assist counties in complying with legislation passed last session that requires counties to develop a local inmate population plan to prioritize admissions. ND DOCR and ND DHS presented on programs and resources that are available and being used to address alternatives at the state level.

A report highlighting the key findings from this planning session is being compiled. We highly anticipate policy will be developed to provide assistance for the local effort of addressing alternatives and expanding behavior health programs.

 

Human Services Committee Talks Behavior Health & Social Services

The Human Services Committee has gathered to work through a full two-day agenda. The start of their work included the first ever review on the next phase of the state's behavior health system. Human Services Research Institute (HSRI) has been contracted for this task. They presented some of their findings and identified potential first steps in implementing their recommendations.

During the presentation, HSRI identified that in North Dakota in 2017 $59 million of state and federal dollars was spent on mental health treatment. About $19 million was spent on substance use treatment. HSRI has found that most of the dollars in both these areas are spent on the most expensive services. They recommend the state continue exploring ways to improve behavior health services provided to individuals who have been involved in the justice system.

In addition, the committee received an update on the "Social Service Redesign" project from DHS Director Chris Jones. He emphasized that the project is really focused on redesigning a system to focus on the client by improving the system in an more efficient and effective manner so that the client receives better service. He told the committee roles may change and the roles may not look the same everywhere. Chairwoman Representative Kathy Hogan called this a comprehensive revamp of the whole system at the state and county level.

"This is one of the largest structural changes we have looked at in a long-time," said Hogan.

"This started out as a financial move, but I am excited to see how it has blossomed into a total system review," said Senator Judy Lee.

NDACo Interim Director, Terry Traynor was asked how the counties are responding to the Social Services Redesign project. Traynor told the committee that since the beginning of 2018, 19 committees have met for day-long meetings that involve 60 individuals from both county social services and DHS.

"From my perception, the counties are excited that the redesign project is focusing on how services can be delivered to the client better," said Traynor. "There may have been anxiety of our county folks going into this project, but through this process the anxiety has lessened and enthusiasm has grown, this is definitely not just a funding question anymore."