BISMARCK — North Dakota’s Legacy Fund has collected more than $10 billion, a milestone that took less than 15 years to surpass.
The money pot that brings in funds from state oil taxes has reached $10.55 billion, according to third quarter reports from the North Dakota Retirement and Investment Office. The office announced the accomplishment in a Wednesday, May 22, press release.
“Strong investment performance and higher than anticipated oil tax revenue contributed to the Legacy Fund reaching this milestone,” RIO Executive Director Jan Murtha said in a statement.
The fund was created after North Dakota voters approved it in 2010. The state puts 30% of its oil taxes into the fund monthly, according to the Legacy Fund's website.
Officials did not expect the Legacy Fund to hit $10 billion in less than 15 years, RIO Chief Investment Officer Scott Anderson told The Forum on Wednesday. They expected investment returns of 5.2%, but the actual return over the last decade was 6.3%, he said.
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Since August, the fund received $563.9 million, which is 12% above what officials predicted, according to the release.
Surpassing $10 billion came "well ahead of schedule," said Ryan Skor, chief financial officer and chief operations officer for the RIO.
"It's significant in that this Legacy Fund is growing," Anderson said of the milestone, adding the fund will be of "great use to North Dakota."
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As the fund balloons, several ideas have been floated about what to do with the Legacy Fund.
In a North Dakota News Cooperative poll, 60% of participants said they wanted money from the pot to be spent on development projects in the state, while 18% want the fund to continue focusing on growth.
When asked about using the funds to eliminate property taxes, 59% of participants were in favor.
The North Dakota Legislature can spend up to 15% of Legacy Fund's principal balance per biennium, though doing so requires a two-thirds vote. A legislative-initiated measure would reduce that to 5%, if approved by voters in November.
That would increase returns for the fund, the release said.
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“Reducing the amount of the Legacy Fund principal that may be drawn down enables the Legacy Fund asset allocation to be more efficient — generating better returns at a lower risk,” Anderson said in a statement.
Last year, the state transferred $486 million in Legacy Fund earnings to the general fund. That money was used for tax relief, to pay debt on project bonds and to support the highway tax distribution fund.
The state said it has transferred more than $1.8 billion from the Legacy Fund to the general fund over the last three bienniums.
By April Baumgarten
April Baumgarten has been a journalist in North Dakota since 2011. She joined The Forum in February 2019 as an investigative reporter. Readers can reach her at 701-241-5417 or abaumgarten@forumcomm.com.
