fedgazette

A referendum for more efficient state government

fedgazette Editorial

Earl S. Strinden

Published March 1, 1990  |  March 1990 issue

In a referral vote on Dec. 5, the citizens of North Dakota rejected all of the tax increases passed by the last session of the North Dakota Legislature. A number of non-tax bills were also soundly defeated. Did this vote mean only that given an opportunity to vote on imposing taxes on themselves, the taxpayers will say no? I don't believe so. There is a public perception that government has not shared in the belt-tightening forced on the private sector by a lingering drought and recessions in the farm and energy sectors of the state's economy. But there is something else.

In my opinion, the citizens want a leaner and more efficient structure of government, and they may well be out ahead of the elected officials. The very well-respected historian, the late Elwyn Robinson, wrote about North Dakota's problems of "too much, too many, and too few." He was speaking of too much government, too many miles of road and too few people. The pioneer decision- makers planned for a much larger population for North Dakota than we will most likely ever realize. We don't need 53 counties. The number of school districts has been reduced significantly over the past decades, but more consolidation will occur. North Dakota has six four-year institutions of higher learning and five two-year institutions. Certainly, if plans for North Dakota would be designed today, the governmental structure would be far different than what we have.

The migration from the farms has been ongoing for at least six decades. It is a painful experience. The closing of a school or the loss of a church strikes at the very heart and soul of the social and economic life of a small rural community.

The challenge for the decision-makers in North Dakota is to provide quality and needed government services to a small population in a large geographic area, and to accomplish this with limited resources. Business as usual is not the answer, and across-the-board reductions will only place North Dakota on a slide into mediocrity. The correct decisions will be difficult, at times painful, and most certainly controversial. North Dakota needs economic diversity. Therefore, maintaining a favorable tax climate must also be a priority. The changing demographics and the historic flow of events call for a new direction in North Dakota.

There is another ingredient in North Dakota's continuing budget problems. This is the infamous Initiated Measure 6 of 1980, petitioned onto the ballot, and passed by a 60 percent majority of the voters. This initiated measure put North Dakota state government into a budget hole with which each succeeding legislature has struggled.

The sponsors of this measure thought they could give North Dakota a bright future by more than doubling the production tax on oil, by mandating dramatic increases in state aid for local education, by lowering the individual income tax, and by eliminating most of the state's mandated local real estate effort for education and replacing these funds from the state general fund. But something not so funny happened on the way to the state's bank account with all of this oil tax revenue. The oil cartel came apart, and the world price of oil decreased about as fast as it had risen. The tax revenue shortfall was dramatic and immediate.

When the North Dakota Legislature adjourned in 1979, the appropriated general fund budget for the 1979-81 biennium was $646 million. When the Legislature convened in 1981, it was presented with a governor's recommended fund budget of $1.3 billion. This huge increase from one biennium to the next was primarily because of the passage of Initiated Measure 6. The Legislature, in its deliberations, reduced the governor's budget to $967 million, but this was still a huge increase. In the 1987 session, my last as House Majority Leader, we passed a general fund budget for the 1987-89 biennium of $1.57 billion. The increase of general fund spending for a six-year period of slightly over 9 percent was well below the inflation rate for this period of time.

This foolish over-reliance on a volatile tax revenue source has been an albatross around the necks of North Dakota legislators. The voting public has not been understanding, as the legislators found it necessary to correct the tax revenue and appropriation imbalances caused by Initiated Measure 6.

North Dakota's future is much more than a place for the propagation of ducks or the roaming range for buffalo. In large part, economics will shape our future. North Dakota has large quantities of oil and natural gas. Within our borders, we have 80 percent of all the lignite in North America. The time will come when the nation and the world will need these natural resources and their byproducts, which can be readily available. The world's supply of grain is down. The potential of economic competition instead of military confrontations throughout the world and the realization in what even a small increase in income per capita in the Third World countries can mean in an expanding food market bodes well for North Dakota.

Isn't it obvious that someday an article in Forbes magazine will tell of some brilliant corporate leader who has increased profits for his corporation by relocating the company's production from an urban center to the rural state of North Dakota? The logic for this move is so strong, the only surprise will be that somebody didn't think of it sooner. The advantages are impelling, including a low crime rate, highly educated workers and local governments that actually work and respond.

The "too many" scenario has made urban problems insurmountable. Our nation will best be served with a strong and vital rural America. The citizens of North Dakota are willing and ready to share in the greatness of our nation.


After serving 22 years in the North Dakota House of Representatives, 12 of those as influential majority leader, Earl Strinden left the state House in 1988 to become a candidate for the U.S. Senate. Despite losing the race and withdrawing from state service, Strinden remains a prominent voice in North Dakota. He currently serves as executive vice president of two non-profit, private corporations: the Alumni Association of the University of North Dakota and the University of North Dakota Foundation.

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