Tax Relief

Burgum: Tax breaks, ARPA investments now profit ND residents

We compete with other states and even other countries for companies, jobs and the manpower needed to fill them.

We compete for workers who choose which state to live in based on our economic strength and capabilities, our infrastructure and communities, and our quality of life.

So when the opportunity arises to make solid investments in our state and provide meaningful tax breaks for our citizens with unexpected resources at a time when our finances are strong and our reserves are full we would be well advised to take the opportunity.

This is the decision before the North Dakota Legislature.

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Our government recently launched Accelerate ND, a package of strategic and meaningful recommendations for investing the state’s federal allocation from the North Dakota US Bailout Act. Thanks to our strategic use of federal funds last year and better-than-expected revenue and Legacy Fund revenues, we also tabled a proposal for an end-fund surplus balance of $ 407 million for the 2019-21 biennium.

Of these recommendations, the easiest way for the conservative majority of our legislature should be to provide a two-year individual income tax credit for North Dakota residents, up to a maximum of $ 500 per declaration per year filed.

This proposal will save taxpayers an estimated $ 207 million over two years. Approximately 218,000 North Dakotans who pay $ 500 in income tax annually would not have an income tax bill in 2021 and 2022. About 133,000 residents who pay income tax more than $ 500 annually would have their bills cut by $ 500 each year.

It is only right to reward the citizens who pay taxes and keep our economy going during the pandemic.

Rather than leaving $ 207 million in the bank earning 0.07% interest and allowing the destructive power of inflation to diminish in value over the next two years, we believe that this money is more good in the pockets of North Dakotans will do.

The Accelerate ND Plan will support growth, diversify our economy, make our state more competitive, improve government services, and create long-term cost savings for the citizens of North Dakota all without raising taxes or growing government.

Our reserve funds are empty. With 749 million US dollars, the budget stabilization fund is filled up to its maximum limit set by law on rainy days. There is more than $ 597 million in cash in our fund for strategic investments and improvements with no commitment. These funds, totaling over $ 1.3 billion, can cover any need or shortfall that may arise before the next session.

Instead of letting inflation eat up the state’s ARPA funds, let us use their investment power now and offer projects for the next season.

Legislators already approved approved but unfunded $ 423 million in funding for transportation infrastructure ($ 317 million) and capital projects ($ 106 million) last spring. We recommend that you finance these projects now in a single action with the ARPA funds of the state.

Of the remaining $ 697 million in ARPA funding, we recommend investing nearly half, or $ 326 million, in labor and economic development to help overcome the biggest barrier to economic growth in our state: labor shortages. Our recommendation also includes an additional $ 237 million for infrastructure and $ 134 million for emergency response, health care, and improving citizen service efficiency.

Rather than keeping those funds in a low-income checking account, Accelerate ND uses the ARPA funds and excess fund balance to target areas with high ROI, including numerous projects that require one-to-one financing from the private sector.

We shouldn’t waste this chance. North Dakotans deserve tax breaks when the government raises more money than it needs. Now is the time to invest in our people, our infrastructure, our economy and our quality of life.

Let’s overtake our competition and put North Dakota in the best possible position for future growth, economic diversity, and success.

Doug Burgum was elected Governor of North Dakota in 2016.

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