WHEELING - North Dakota leaders told a West Virginia delegation Thursday that the Mountain State should establish a future fund from its oil and natural gas severance collections, even though they might be tempted to spend the extra dollars on today's needs.
State Senate President Jeff Kessler, D-Marshall, led the group of 18 state lawmakers to Bismarck, N.D., to discuss the success of the North Dakota Legacy Fund - an account filled with oil and natural gas severance taxes. Labor and business leaders also joined on the trip.
North Dakota leaders "told us the demands on saving money are always a strain," Kessler said. "They said people are always going to ask you why you should put this money in a savings account when they want you to spend it now. But that doesn't get you ahead in long run. The message from them ... was to save money, and put it in the bank. We were able to see what they do, and that they have been successful doing it."
The North Dakota Legacy Fund was created in 2011 and already has generated $1.3 billion for that state's future.
North Dakoka voters in 2010 approved a constitutional amendment that established the Legacy Fund. A similar proposal was defeated by voters in 2008, and Kessler noted legislation creating the Legacy Fund idea also was rejected multiple times by the North Dakota Legislature before it ultimately was put on the ballot as a constitutional amendment.
Kessler's idea for the West Virginia Future Fund also has been rejected during recent legislative sessions. His proposal would set a threshold for severance tax collections, and once that threshold is reached, hold back 25 percent of the resulting funds. It would place the money in an interest-bearing, special revenue account. The principal and interest of the Future Fund then would be encumbered for 20 years to ensure its growth.
The North Dakota Legacy Fund receives 30 percent of that state's revenue resulting from oil and gas production.
Kessler said he asked the North Dakota officials to show by raising their hands how many of them were Democrats, and how many were Republicans. There were an equal number in the room, he noted.
He asked them to raise their hands if they thought the Legacy Fund was a good idea, and all raised their hands, according to Kessler.
"They told us that to get our Future Fund approved, it will take bi-partisan support from the legislature, as well as a willingness from them to get buy-in from constituency groups," he said.
Among the group were 14 Democrat and four Republican state lawmakers, including Sen. Robert "Rocky" Fitzsimmons, D-Ohio, and Delegate Phil Diserio, D-Brooke.
The North Dakota officials told the West Virginians there will be people who will object to West Virginia's saving for the future because "people want to spend it now," Kessler said.
"They want pay raises this year, and they say, 'Fix my roads,'" he continued. "All that stuff is fine. But if you don't build a nest egg, you don't have the financial ability to get it done and get it done right."
Kessler estimated the trip cost the state $18,000 to $20,000 - or about $1,000 per legislator.