Land Board wants language fix and $137 million backfill for two education funds

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BISMARCK, N.D. - What happened to $137 million in the state's share of oil tax from the Fort Berthold Reservation?

Over the past decade, some say two funds- the common schools trust fund and the foundation aid stabilization fund- were short changed the money. Others say the money was correctly divvied into other places.

The Board of University and School Lands- which includes Governor Doug Burgum- voted Monday 4 to 1, to support a bill which clears up any confusion in the law.

Senate Bill 2362 clarifies that 10 percent of the oil extraction tax the state collects will go to each of the two pots of money, which land commissioner Jodi Smith says are used for per pupil payments.

Smith, along with Governor Burgum, Secretary of State Al Jaeger, Attorney General Wayne Stenehjem and State Superintendent Kirsten Baesler all supported a motion looking for a solution that would reimburse the funds. State Treasurer Kelly Schmidt was the only opposing vote. Schmidt says she supports the bill to bring clarity, but says she doesn't want to wrap both issues into one bill and get nowhere.

“I believe those are two separate conversations and I don't want to put one ahead of the other and lose the opportunity to bring clarity to the issue,” said Schmidt.

“On all extraction taxes within the state of North Dakota, the common schools trust fund is to receive 10 percent. If that fund has not been paid that 10 percent over the past 11 years, it's time to do the right thing and refill it,” said Jodi Smith, North Dakota Land Commissioner.

Schmidt added she received a letter from the assistant Attorney General to continue depositing funds as they were and they’ve worked for greater clarity since 2009.

But what's the legislature's willingness to address the fix and back fill the money? Sen. Ray Holmberg, R-Grand Forks, and Senate Appropriations Chair, says there’s a strong appetite for clearing up language, but beyond that is anyone’s guess.

“I think going forward that's a done deal I think. The language might needs some tweaking but that should be a done deal. The other part is make the case and see what the legislature does,” said Holmberg.

There’s also concern that if the legislature doesn’t “backfill the buckets,” a lawsuit will follow. Holmberg says the legislature isn’t new to threats of lawsuits and “sometimes they happen and sometimes they don’t.”

We asked Holmberg and Schmidt about growing political nature of this issue and whether there will be repercussions in the 2020 election.

“Politics is always involved in these things and it’s typically overplayed from one side or the other,” Holmberg started. “Sometimes these issues that seem very hot and political don’t resonate with the public.”

“I am never looking forward to an election, I will always do the right thing,” said Schmidt. Schmidt is up for reelection in 2020. Holmberg was reelected in 2018.