North Dakota Tightens Legacy Fund Spending in Bid for Higher Returns
Bismarck, N.D. (North Dakota Monitor) — In a significant move aimed at enhancing its financial prospects, North Dakota voters have endorsed a new measure that restricts spending from the state’s Legacy Fund, a trust established to generate ongoing revenue from oil taxes. The fund, which has amassed a value of approximately $11.4 billion as of August, will now limit expenditures to 5% of its principal per biennium, translating to about $540 million. This marks a departure from the previous cap of 15%, or roughly $1.62 billion.
The measure was approved with 52% of the vote, positioning the state to focus on longer-term investment strategies intended to boost returns. Scott Anderson, chief investment officer for the Retirement and Investment Office, highlighted during a recent meeting of the Legacy and Budget Stabilization Fund Advisory Board that the amendment gives the state greater flexibility in managing the fund’s investments. As per a study from consulting firm RVK, this alteration could yield an additional $30 million in revenue within the first year, contingent on decision-making regarding the fund’s allocation.
Anderson urged caution, recommending that state officials hold off on investment strategy changes until after the 2025 legislative session, given the current fluctuations in capital markets following recent Federal Reserve interest rate cuts. Furthermore, three Jamestown lawmakers have expressed plans to propose legislation requiring comprehensive transparency by mandating the online publication of all Legacy Fund holdings.
As the state navigates these financial waters, stakeholders await deliberations that will shape the future of North Dakota’s key revenue source.
(Story written by Mary Steurer – North Dakota Monitor)
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