(upbeat music) - This is "North Dakota Legislative Review".

I'm Dave Thompson.

Thanks for joining us.

Our guest this week is the House Minority Leader, Josh Boschee of Fargo.

Representative Boschee, thanks for being here.

- Dave, it's always a pleasure to be on.

- Thank you.

And since you're in the minority, let me ask you about your caucus and the priorities for the minority session.

- Yeah, you know, we've come into this session recognizing that the number one issue for us is to continue to advocate for more expansion of resources and affordability for childcare.

You can't go to any community throughout the state without seeing that childcare is the number one issue facing those folks.

- Since you mentioned childcare, that seems to be a pretty big issue with a lot of the majority party as well.

- Absolutely.

You know, I left the organization session in December feeling really good about the fact that, I think this was the first time in a long time we heard all the leaders across parties, across chambers, the executive, the legislative, all saying, if we do anything, we need to make sure we address childcare this session.

- And that helps with the workforce shortages.

- Absolutely.

You know, childcare workers are the workforce that supports our workforce.

Without us having quality, affordable childcare throughout the state, other parents aren't able to go to work.

And we're seeing that strain be put on our, whether it's healthcare, whether it's education industry, you name it.

- So what needs to happen in childcare to make this work?

- Well, we're really looking at a three-pronged approach.

First of all, we need to make sure that we continue putting resources toward making it more affordable by helping with childcare assistance program.

That was boosted with the COVID dollars coming out of the pandemic.

We need to put some state dollars behind that as well.

The second part is making sure that we're providing opportunities for capacity.

So how are we making sure we're growing spots throughout the state that are quality, that are in all sectors throughout the state.

And then third, and probably even more importantly, is making sure that we're able to pay childcare workers what it's worth to do that job.

- But your middle point there about spots, I'm hearing a lot of people around the state saying, we would love to get into childcare, we'd love to get back in the workforce, but there are no spots available right now.

- Absolutely, that's one of the parts of the funnel that's keeping people out of the workforce.

- Besides childcare then and the workforce development, what other big issues are you looking at this point?

- Well, you know, we're really excited about the opportunities the state has ahead for us when we look at the resources financially that we have right now.

But a lot of these are one time resources.

So we're finding ourselves a lot of times being opposite of the majority party, trying to be the fiscal conservatives.

My first session was 2013.

We had a $1 billion surplus.

Two years later in 2015, we had $1.5 billion deficit.

When we depend more on oil, that makes our budgeting much more volatile.

So we wanna make sure that when we're doing things like childcare, workforce enhancement programs, funding roads and bridges and schools and healthcare, that we're doing it in a way that's sustainable regardless of our revenue sources.

- Since you brought up oil, it seemed to be a little bit tenuous at times in terms of a revenue stream.

- Yes, absolutely.

And we're becoming more and more dependent on it.

We're putting more in the general fund.

Part of that, I think, is us being honest about how we budget.

We don't move it at the end.

We bring it in in the beginning and we use it as a funding source.

And that's one of the reasons I have big concerns about some of these property tax, what's being reformed or stated as relief.

But if we're gonna get rid of the income tax, we know that's $500 million of continuous appropriations that we take off the table to fund the important issues North Dakotans want.

- So how do you stand about tax relief in general?

- You know, there's a number of issues that are out there.

Of course, there's the governor's proposal to move us down to a 1.5% flat tax, and that certainly helps a lot of people out.

But again, that's a long-term solution and that takes money off the table.

So right now we're looking at Representative Heinert here out of Bismarck has a proposal to extend the temporary tax relief in the income tax category that was provided out of the pandemic.

So looking at how can we maybe support something like that.

- So there are lots of proposals on the table.

- Absolutely.

And then in the Senate, you know, I'm in the House, so the Senate is talking about property taxes.

So we'll see what comes out of that proposal from Senator Schaible.

- So I have to ask the question because I've often wondered about this.

Property taxes are not levied by the state.

And when Governor Burgum talked about his opposition to lowering property taxes with state dollars, he said it's often that the other local governments will raise the mill levies.

- Yeah, I mean, we've certainly seen that and there's some levers that we can put on that, but the reality too is this has been in an environment where housing values have increased as well.

And so I work in real estate when I'm not here in Bismarck.

And you know, people are loving what they're able to sell their houses for.

That's great, that's an awesome asset for them.

But with that then comes increase in taxes.

And so one way we can help with that in the state, recognizing that it's the local subdivisions that assess property tax, is what type of supports can we provide when we think about law enforcement, emergency services, planning?

How can we help offset some of those costs so they're coming from the state and that can be taken off the backs of local property tax owners?

- So you're apparently looking at ways to do that at this point?

- We are looking at a variety of different ways.

You know, I don't have a specific proposal going forward at this point, but I know Senator Hogan and others in the Senate are looking at some of that.

- Well, that just begs another question.

The Senate's got four Democrats, you have 9?

- 12.

- 12.

So you've got 16 Democrats in a legislature of 141 people.

How do you make a difference?

- Yeah, you know, it's a good question, we get it a lot.

But we continue our path forward of making sure that we hold the majority accountable.

We work with them on issues that we agree on.

And then we hold them accountable for the issues that are creating distractions and aren't focuses of the reality of North Dakotan's everyday lives.

You know, we have had small numbers for a couple sessions now, but we've always been a part of the ruling majority.

When you look at Medicaid expansion, how strongly we fund K-12 education, the expansion of supports through behavioral health and addiction services, we've been a part of all of that.

- I was going to say that partisan issues are few, but they do get a lot of coverage, so to speak.

- You're right, you're right.

And you know, the beauty of us being a citizen legislature is that every idea gets an opportunity for a conversation.

That becomes a management issue as well for us as the legislature.

And so, while I hope some of these, for lack of a better word, culture war issues that are being introduced by a lot of the extreme wing of the GOP caucus can be subsidized and get out of the way so we can really focus on childcare, K through 12 funding, making sure that we have the water infrastructure projects going forward and all the other needs that people are really paying attention to.

- Now, I asked Senator Hoeven this question last week.

Minot still has a lot of work to do on its flood control project.

The Red River Diversion Project seems to be now fully funded from the last session.

Are you looking at the Minot project and maybe trying to speed up the timeline so we don't get construction inflation being a problem for it?

- I would certainly be in favor of looking at the resources we have available so that we can speed that up.

We saw how much savings we get with the Fargo or the Red River Valley Diversion Project, by speeding that up in Minot, should get that same opportunity.

Especially when we have things like the Bank of North Dakota, we have the legacy fund, all our piggy banks, for a lack of better word, are full.

So we have some resources to leverage, whether we look at some additional bonding, or is it cash that goes out the door to pay for those projects?

- Well, you mentioned the Bank of North Dakota.

It's North Dakota's asset and probably, and you've heard a number of states have been looking at, can we do the same thing North Dakota's doing?

They haven't done anything yet, but really if you take a look at it, the Bank of North Dakota is kinda like a gem for us.

- Absolutely.

You know, not only are we able to hold all of our reserves there and gain interest off that and benefit the state that way, but the creative financing that can happen so we can make sure we're addressing local projects, especially around infrastructure.

You know, the bank right now is asking that, their again, record profits that they have made, that we as the legislature don't pull that out and put that in the general fund.

I think that's an important conversation for us to consider this session, because as we continue to do bigger and more projects through the bank, they also need the leverage to have cash on hand to borrow against with that.

So it becomes the thread, when we pull one, what else is pulling over here from the sweater?

- Well you mentioned, you know, some of the infrastructure projects and the Bank of North Dakota, and this is one story I've been following since the pandemic, is the money for these career and technical education centers, the career academies.

And there's money coming from the federal government.

When it comes we don't know yet, but that's also been affected, that's also a part of construction inflation they're talking about.

They probably need an infusion of cash in order to get the projects done to the level that they promised when the whole projects were approved.

- Right.

Yeah, it's unfortunate we have not had that nearly $100, $110 million released from the US Treasury.

You know, the current administration's priority has been focused on rural broadband access.

Fortunately in North Dakota, we're pretty well connected already.

So when our priority is looking at getting these career and tech ed programs funded, you know, that's on the back burner out of DC but we hear it's coming soon.

So in the meantime, again, we have the Bank of North Dakota that can get some money out the door.

We can reimburse the Bank of North Dakota once that money comes from the Feds.

We know it's coming, it's just a matter of when.

And so you're exactly right.

As we see inflation go up throughout the state, we're talking about buildings in places like Williston and Minot and Fargo and and everywhere in between so that we can house these career and technical programs.

- It sounds like there's fairly broad bipartisan agreement on this.

- Absolutely.

You know, this again, the gift of that federal money coming to North Dakota allowed us to tackle this not in just a way that one community gets it this session, the next community the next session based on the limited resources we might have had.

But this, I think it's eight or nine communities that are gonna have, at the same time, career and technical programs implemented.

So it's equitable throughout the state.

- Well, you mentioned some of the social issues.

I should get into that a little bit.

Today the House, when we record this, the House voted on a bill that puts restrictions on drag shows, which is kind of interesting.

- It's, you know, interesting is one word.

I think the other is that we have a faction of legislators that seem to think that these are the problems that are facing North Dakotans.

And I can tell you from door knocking, it has nothing to do with childcare.

It has nothing to do with workforce.

These are bills that are coming from far corners of the internet.

And I just wish we didn't have to address them.

- Between that and the numerous bills dealing with transgenders.

- Yeah, and that's what's really unfortunate is that, you know, there are people amongst us in our communities, that are part of our families, who we may not understand, that people are trying to figure out, you know, why someone would consider themselves transgender.

But regardless of that, these are people who are part of our communities.

These are people who are helping the success of moving us forward.

You know, they work in our grocery stores.

They work in our hospitals and our schools.

And with this number of legislation that's saying things like, well, we don't want to have to acknowledge you.

We don't want you to be able to be who you are.

We don't want you to be able to essentially exist in our state sends a huge message not just to transgender and the LGBTQ community, but their family, their friends, the people who love them, who now when they're deciding, do I go to Minnesota or North Dakota?

Do I go South Dakota or North Dakota, Colorado or North Dakota for a job?

Why would they come here?

It says nothing about the quality of life that we have and we can make sure that we continue to be a state that moves forward, we respect the fact that people are different.

As long as they're hardworking and adding to our communities, we'd love to have you.

- And there we go with the workforce issue, that all kind of blends together almost.

- Absolutely.

You know, and the unfortunate thing, Dave, is I think for many of the listeners and the watchers of this is to understand is when we lose physicians and teachers because of some of these issues, every community hurts, every child gets hurt, every patient doesn't have access to a doctor.

And again, at a time where we are dealing with workforce shortages in education and in healthcare and in private industry, you know, this is not the signal that we want North Dakota to be sending out to the rest of the country.

- Well, it's a little bit of a workforce issue, but it involves state and local government employees who are on the PERS plan, This movement toward changing the PERS plan from defined benefit to defined contribution.

Which has some momentum in the House for sure.

But I hear some pushback from both parties on that.

- Yeah, I think, you know, the conversation has been ongoing for years about whether, for public employees, at least for new hires, do we change the retirement program?

I had the privilege of sitting on two committees in the last interim, both the retirement committee and chair of the employee benefits committee, where we've really looked at this and now we're getting data.

And with that data is coming, what is this gonna cost?

And the plan from Representative Lefor and others that is showing that we should oppose the plan, is showing that it's gonna cost taxpayers, over the next 20 years, over $5 billion.

Versus the plan introduced by Senator Cleary here in Bismarck, of which I'm a co-sponsor, you know, if we fix the plan, if we do the things we committed to and start adjusting the amount that we pay as an employer each biennium, we can do it for around $500 million and get it back on a track that's soluble.

- And this is a case where the legislature had a chance to solve this early on, and then because of the intransigence of some, it was not solved.

- You're exactly correct.

You know, there was a commitment made coming out into 2011 in which we as the employer, the state of North Dakota, as well as the cities and political subdivisions that are part of the program, for four years would increase their share 1% per year.

The employees were gonna match.

Well, the employees did their 4%, we stopped at 3%.

And for a number of years we haven't funded that final 4%.

Now we compare that to the teachers' fund for retirement in which both the employer and the teachers did that 4%.

Teachers' fund for retirement is on a path to be solvent in the next decade.

And that's because they did the math, they listened to the actuarials, we did the investments and made the tough decisions that had to be made.

But now we're having to make even tougher decisions.

- One of the arguments for going to a change is that younger employees like the idea of portability of a retirement plan.

But there are some like Senator Cleary who come back and said, wait a second, the people I talked to said they want some certainty when they have retirement.

- Absolutely.

And that's what the research, that HRMS from the Office of Management and Budget, that's the Human Resources Division has found, is that people want, you know, a retirement plan they can depend on.

And so Senator Cleary's bill, again, which I'm a co-sponsor of, we provide people the choice then.

If this is truly about whether people can choose a defined contribution or defined benefit, then let's make that part of the policy too.

- Yeah, he is talking about choice.

If the employee wants to come in at a defined contribution, fine, defined benefit, fine.

You make the choice.

- Exactly.

And we will put in the same level of investment in you as a worker and you'll match that investment and, you know, the decision you make will impact what you get for retirement one way or the other.

- One, I think it's a huge issue myself about this idea of animal agriculture, having a carve out of the North Dakota Corporate Farming Law to allow corporations to invest in milking operations, swine operations, turkey, chickens, whatever you wanna call it, and cows.

And there seems to be a lot of support by some, but there's still some pushback from some farm organizations.

- Yeah, you know, first of all, the voters spoke on this.

Nearly 67% of voters rejected the idea that we want someone other than our family farmers owning farms or ranches in North Dakota.

And that wasn't too long ago.

So the fact that the governor and others are trying to advance this idea that we will carve out, and I think they're trying to be creative in it, just like any other law, you know, we make black and white laws for a gray world.

But essentially what they're saying in the law is they're telling farmers they're no longer farmers.

It's essentially taking out of the definition of a family farm, hog operations, ranches, you know, these facilities.

And the challenge there is there's other ways that this can be done.

It's already being done.

It's just a matter of how do we support those family farms?

- So in other words, families can have their own corporations.

- Absolutely.

That's been on the books for, you know, as long as I know and follow this discussion.

But yeah, families are able to create their own corporation.

They're able to go get the investments they need.

You know, certainly I understand the concerns related around the dairy industry of the fact that we've continued to lose dairy operations, but there's ways, again, the state can work with, whether it's the Bank of North Dakota or other programs of how do we invest in these family farms?

The other reality I think that North Dakotans have to understand is if we move to this expansion of allowing corporations to own farmland in North Dakota, comes with its hog barns and these large operations that, you know, it's one of those things that people say, it sounds great, but I don't want it in my own backyard.

So what happens when it ends up in your backyard because the state opened up the law?

- I don't know if legislation's in, but I heard that there was going to be some, oh, kind of easing of rules for locating animal operations.

- It's very likely.

You know, we've seen that chipped away over the last several years, taking away the local control aspect of it as far as zoning and whatnot.

And you know, as I've talked to some of the groups that represent animal agriculture, I said, why don't we work with, you know, the Department of Commerce and the community development division to go identify the communities that would want some of these operations?

Instead of communities being forced upon because the government changes the rules.

Let's figure it out.

Who, I'm sure there's communities who would love to have these types of facilities there from a workforce standpoint, from a keeping their communities vibrant and moving forward.

So let's do that, they exist but let's not force it upon communities that don't want it.

- So what you're saying is conversation could ease the pain or head off some of this discussion?

- Absolutely.

Again, you know, North Dakotans are entrepreneurial, we're hardworking, we like to find solutions to these problems.

And there are communities out there that would be interested in tackling this.

Let's go find out who they are.

- Is there any particular bill that you're kind of watching saying, I really am interested in this and maybe not getting a lot of publicity?

- I appreciate the question.

So I'm gonna take the opportunity to brag a little bit about a bill I've introduced.

So I'm excited.

I'm working with the policy decision makers and the appropriators around human services.

So there's this concept that's been around for well over a decade called pay for success or outcomes-based funding.

So the idea is, is that the state will set aside a certain dollar amount, I'm asking for $10 million to be set in a bucket, and then the private sector comes in and the Department of Human Services would contract with them to try to find some solutions.

Maybe it's around literacy, maybe it's around recidivism, maybe it's around work, making sure that people who are receiving government assistance get better jobs or better paying jobs.

We can create a contract with them to meet some outcomes.

And what they've found is if, you know, if that entity solves the problem or finds a path forward and hits certain outcomes that are based in the contract, we pay 'em back.

If they don't hit the outcomes, we don't pay 'em back.

And the beauty of it is, and what the states and the school districts that have done this before have found is, you know, let's say it's literacy.

The goal was to hit 10% more literate students in third grade.

They might've only got to 8%, so you didn't have to pay 'em, but we made progress.

So it's a way to find some of these solutions outside of the current system and to find ways that work.

- Okay, so it's a performance based type.

- Performance based.

We're not just paying people and sending money out the door.

There are strings attached, there are outcomes that have to get met.

And then it also allows us to find ways that work for our communities.

- Well, that also begs a question because human services is a huge budget.

But I was kind of surprised in the governor's budget when he only authorized $10 million for further study of a new state hospital.

And you know, there were interim committees and several reports for years saying, we need a new state hospital, but yet we're kind of kicking the can down the road a little bit.

- Yeah, I think, you know, this continues to be a conversation around the greater conversation around behavioral health.

And the state hospital and institutionalization of people has, I think, served its time.

You know, I'm of the viewpoint of, I think there are ways the state can use our money differently, and how do we incentivize these facilities being built throughout the state?

You have Dickinson looking to build a behavioral health hospital.

You have Williston with maybe a new hospital, Minot's gonna open up Trinity sometime this spring, Grand Forks, Devil's Lake, they're all looking to build new facilities.

How can we incentivize for them to make sure they have dedicated behavioral health beds?

So when people are sick or dealing with a crisis, they're able to stay in their community, be close to their family, be with the support network they have.

And then a place like the state hospital maybe for the people who just don't have the resources in those communities or the expertise, they can go away for a little bit, be taken care of in a facility that can meet their needs and then go back home and continue their care.

- And that basically follows the dictum that the best treatment is local treatment.

- Absolutely, yeah.

And, you know, behavioral health, I think we're getting closer and closer where we're looking at behavioral health as a part of our entire healthcare, right?

It's no longer that the health I have in my head is any different than the health that's in my leg.

And how do we make sure that, we don't expect people to go get certain types of treatments, you know, six hours away and stay overnight and live in a hospital when they can have those services provided at home and they can be home every night.

- I have a totally different question.

And this goes, there are a number of bills, and I think most of them are in the Senate about carbon dioxide pipelines.

You know, should we have carbon dioxide pipelines?

You know, Summit Solutions is trying to get carbon dioxide from ethanol plants in the upper Midwest and store it in North Dakota.

There seems to be some pushback from some legislators.

What are your thoughts on that?

- Yeah, you know, it's definitely an interesting conversation and one that I've paid attention to ancillary, knowing that it's mostly happening in the Senate right now.

So we'll see if it comes over to the House.

But I think first and foremost, as we look at continuing industrial development around the state, whether that's in place facilities or the arteries such as pipelines that get product to different parts of the state, we have to figure out how to balance landowner rights with the opportunity to develop and, you know, the term of the government continuing to use eminent domain for development is something that's scary to people, especially when you think about farm families.

Again, we're talking about the land they've had in their family for generations, they've invested in.

So I think if our time was more focused on how do we make sure we find better balance in there versus saying you can or you can't do that would provide for better outcomes.

- Do you think that Summit has been above board dealing with landowners or are are there issues there?

- You know, I don't live in any of those communities where the pipeline is coming through, so I only hear from some landowners and I hear some from Summit.

So, you know, my message to Summit specifically as I visited with their folks at the (indistinct) is make sure you're taking care of our landowners.

Make sure you're take, those are our families.

They're gonna be here long after Summit's come and gone.

So we need to make sure that they're taken care of.

- You know, there's another issue that's sitting on the table and I'm kind of watching it too, is this idea of getting Bakken gas from, you know, into the valley in central North Dakota.

$150 million seed money, $150 million, and there are no takers because they're trying to find enough customers to get it done.

And there's some talk of maybe some tax incentives or some other ways to sweeten that pot.

Where do you come down on that?

- Yeah, you know, again, to expand on kind of your introduction of that is looking at how can we reduce flaring?

How can we make sure that we continue responsible development of our energy resources and put that one time natural gas into a pipe and take care of communities throughout the state?

You know, it's talked about specifically about getting it out east so it can get into different industries, but the beauty of that is along the pathway, the northern corridor of the state and the center of the state who don't have natural gas would have access for lines to pipe off of.

So, you know, I'm certainly open to different ways.

We just passed out of the House last week, I believe it was a property tax incentive.

There might be some things that we'll have to do as a state to help incentivize.

Maybe we pay forward and buy into that pipeline for a short period of time till other contracts come along.

I think it was Wyoming that did that and found it as a good opportunity.

But it's something again that helps most of North Dakota, if not all of North Dakota.

- So you incent it if you can through some property tax breaks.

You've got the $150 million seed money.

Maybe this could come together if they get enough customers.

- Absolutely, and that's the key is getting those end users on board.

And that's what the Wyoming model, as I understand it, looks at, is at that time, I think the state had to get in and, you know, basically be a customer for 20% or whatever the number was until someone else came along and saw that it was a viable project.

- Well, I have to ask you this question, and you probably anticipated this.

80 days is long session.

That's what your constitutional limit is.

Can you be done in less than 80?

- I think this is the session we will.

There's been a lot of talk, you know, there's a lot of key decisions that still have to get made in the appropriations committee.

But once those get made, what we're really seeing is the House and Senate appropriation subcommittees are working together.

It used to be they'd hold each other hostage every once in a while.

The House would cut everything, the Senate would put the money back in.

But what we're seeing right now is, so for instance, the Department of Human Services budget, those folks are talking, they're making sure that when something comes over from one chamber to the next, that it's in a format that's likable to everybody.

So we can spend less time, especially in those last two weeks, of just sitting and staring at each other to see who's gonna flinch first as far as the Senate or the House.

So I'm hopeful, but we still have another 60 days to go.

- And with that, we've run out of time.

Sorry about that.

- Thanks Dave, always a pleasure.

- Our guest, Josh Boschee, the House minority leader.

He's from Fargo.

For Prairie Public and "Legislative Review", I'm Dave Thompson.

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