State eats mill's bread
North Dakota State Roundup
Published November 1, 2003 | November 2003 issue
North Dakota relies on revenue contributions from its state-owned grain mill and elevator operation to increase its budget and to fund numerous state programs. But for the past two bienniums, the Legislature has counted on greater contributions from the mill than profits could provide.
The Grand Forks mill directed $6 million to the state's general fund in the last two-year budget, which ended June 30, but made only $3.93 million in profits over that same period. This is a repeat of the previous biennium, when mill profits totaled $2.18 million, but the state treasury expected $3 million, requiring the mill to borrow money and dig into reserves to meet the request. Only twice before had the state asked for more money than the mill made selling flour, and that was in the late 1970s and mid-1980s.
The mill remains financially sound: According to auditors, through June 2002 the mill had $20.6 million in assets. It also has a $12 million line of credit at the state-owned Bank of North Dakota.(The state-owned bank also contributes profits to the state treasury; during the 2001-03 budget period, that figure was $78.7 million.)
During the next biennium the Legislature is asking for less from the mill and included a provision that the transfer of funds cannot exceed the mill's profits during the period.