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Monday, April 06, 2015


The bill which had emerged as the best candidate to promote an expanded role for the Bank of North Dakota to help local taxpayers by financing school construction needs has been gutted.

In our last update on this issue, things were looking positive for the cause of creating a way for local school districts to obtain low interest financing from the state without the state outright funding the construction.

Senate Bill 2178, as it came out of the Senate, received a unanimous yes vote with 46 Senators in favor and NONE opposed.

The House Education committee saw fit to remove all the substance of the bill, and only leave the components of the bill related to insuring of buildings.

Instead of taking this approach, and immediately allowing schools access to construction loans from the Bank of North Dakota, it appears that the House is keeping the tandem pair of SCR 4003 and SB 2039 alive.

SB 2039 calls for the use of up to $300 million to be used from the School Foundation Aid Stabilization fund for the purpose of a revolving loan fund for schools to draw construction loans from.

However, this plan requires passage of a ballot measure on the June 2016 Primary Election Ballot. SCR 4003 outlines how that ballot measure would look.

Senate Bill 2178 as it left the Senate was meant to be a stop-gap solution until the tandem pair of SCR 4003/SB 2039 could go into effect. (The House has not yet acted on this tandem approach.)

The Senate wisely removed the portions of SCR 4003 relating to the state retirement pension fund, so it should see little to no opposition when it is on the ballot.

The fact remains, by leaving school districts in the lurch until July 2016, some schools may see the need to see traditional bond issues, and pay higher interest rates. That translates into higher property taxes.

After all the money put into education over the years in the name of reducing property taxes, the House seems to be ready to put the kabosh on a plan that only has a $19 million price tag, but could save local taxpayers well in excess of that over a 20 year period.

It's a new reality that won't go unnoticed.

-Dustin Gawrylow, Managing Director

North Dakota Watchdog Network


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