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State leaders choose to not allocate federal money in face of controversial new law

Updated: Jun. 16, 2021 at 4:00 PM CDT
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BISMARCK, N.D. (KFYR) - Gov. Doug Burgum, R-N.D., said the state is dealing with an unintended consequence of a bill he tried to veto just this year.

North Dakota has more than $1 billion in federal aid, but a new law says the state can only spend $50 million for now.

Much of the money is COVID relief aid or from the federal stimulus package.

The Emergency Commission responsible for spending it decided to spend less than $1 million to avoid complications with the new law.

When the state gets that money, it first needs to accept it before it can be spent. But that new law is creating a barrier before we can accept the money.

Last year, lawmakers said they wanted more of a say on major federal aid. So, they made a law saying a small group of lawmakers and the governor can decide up to $50 million for the entire biennium. Anything beyond that, the full legislature gets to vote on it.

And that’s creating months-long delays in getting big money to agencies.

“We’re in an era right now where the federal government is providing money to the states to solve problems with education, with health care, and a variety of other important areas. And we’re now constraining on our ability to do something as simple as accept a grant from a private agency to move a program forward in North Dakota,” Burgum said.

Rather than chip away at the $50 million available, Burgum and the committee decided to hold off on using most of it. They have only allocated $750,000 of it.

That means some agencies are having to wait for their funds. So some agencies are exchanging funds among themselves in the meantime.

But these delays are also pushing back federal grants awarded to agencies.

“That cap is going to prevent us from doing outside fundraising programs for private sources. That also kind of doesn’t fit with what we’ve been told we should do; is to build those public-private relationships,” ND Center for the Arts Executive Director Kim Konikow said.

The law requires the full legislature to approve the spending in a special session.

The only one scheduled so far is one for redistricting in November.

With lawmakers choosing to not assign any money until a workaround can be reached, money can’t even be assigned to departments for another five months.

The governor can call for a special session himself, and he has not ruled that out as a possibility.

Burgum also didn’t rule out going to the State Supreme Court law after the attorney general said the law itself wouldn’t hold up in a legal challenge.

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