(patriotic fanfare) - Hello and welcome to Prairie Public's Legislative Review.

I'm Dave Thompson.

Thanks for joining us.

Our guest on the program is the Senate Minority Leader, Senator Kathy Hogan of Fargo.

Senator, thank you for being here.

- Thank you for inviting me.

- Well, let's talk about your new role as a minority leader.

And, unfortunately there's only four of you.

- Being minority leader is a real privilege.

Even though there are only four of us, we have a lot of opportunity to interact with leadership on making policy decisions.

And, I have to say that I have appreciated the majority's flexibility when we need help, because we're not able to cover all committees.

And so, the chairs of the committees where we don't have a member, have been very helpful.

- So they're willing to, you know, let you know what's going on, or maybe, have you invite somebody from outside to be an observer?

- They are totally open to that kind of activity.

And, we have some people watching those committees, and when there are issues, then we can talk about them with the chairs or other committee members.

So, it's been a challenge, many new things when we don't have enough minority to cover every committee, but, it's also been very collaborative.

- But as a minority leader, then you have to sit on committees too.

- I am sitting on two committees.

- And, they are?

- Human Services, and Agriculture.

- Interesting.

That's an interesting mix.

- Well, you know, the history of me in agriculture?

I was placed on Agriculture when I was in the house, as punishment for not voting the right way.

Alleged management.

And so, I was placed on a committee that people thought as the most urban legislator in the state, that I wouldn't like.

And, I fell in love with it, and I've stayed on it since.

- So, you have no problem being on Agriculture laws.

- I love being on Ag.

- Well, one thing that we talked about, coming into the session, I think there was a lot of concern about workforce development.

And, one part of that is childcare.

I've heard more about childcare from both parties, from both chambers.

Where are we at in terms of coming up with some kind of plan for childcare going forward, knowing that the fact that that's one thing that is possibly hindering workforce development in North Dakota?

- Childcare is, I think, one of the biggest workforce challenges.

And, I think everyone agrees on the basic assumption.

Finding solutions is a little bit harder.

The governor put in 73 million, in new, enhanced childcare proposals, but many of those programs were just replacements for Covid dollars.

So that, we'd started programs during Covid, and it was replacement dollars.

The Democrats had five bills with a comprehensive plan, with very different approaches, to how to solve the childcare issue.

- So, can you talk about some of those approaches?

- Sure.

One of the approaches we had on the floor today, it was a childcare tax credit, because oftentimes we talk about low-income families needing childcare assistance, but middle-class families are really, sometimes, paying 30 to 40% of their income, in childcare.

And so, we had a bill to allow a childcare tax credit, and it was interesting because it came outta committee today, "do not pass," because they assumed that it was in the governor's package.

And, the governor's package did not have anything on childcare tax credits.

So, we flipped a vote today, and that bill will go onto appropriations and be considered by the appropriations, with all of the other five bills.

- I need to stop you right there, just so people understand, flipping a vote is not necessarily an easy thing to do.

- It's a very unusual thing to do.

Although in this session, I've seen more votes flipped than usual.

- [Dave] Yeah, there have been a number of things - A number of things.

- Thinking about the insulin bill came out with a do not pass, 4-2, and it got flipped.

And, now that's in appropriations.

- Now that's in appropriations.

And, flipping a bill means that they recommend one thing, and we vote a different way.

And so, it's unusual, but, one of the unique things about this session, is the number of flipped bills we have.

- Well, you talked about the childcare tax credit.

What are some of the other approaches that you have.

- The second major one, is to increase the payment for childcare assistance, which is the federal program that helps low-income families.

We're going to try to simplify that program, and increase the reimbursement rates, which just helps providers and families.

The second one, the third one, that's really important is we want to offer direct payments to licensed childcare for simply being open.

Stabilization grants.

Stabilization grants started during Covid, and that's what kept our facilities open during Covid.

But, we wanna operationalize, set the policies, and establish this as an ongoing way for the state to support workforce through childcare.

- Yeah, there's been a, that's one of the big issues, is people want childcare, people want to go back to work, but they can't find it.

- They can't find it.

And, we're losing childcare.

Right now, the Covid funding is going away, and the number of facilities that are closing right now, terrifies me 'cause I think we could lose those facilities over the next six months.

I suspect we could lose 20% of them.

- Is there, so you're hoping that maybe, what's going through the legislature right now, might give people some hope to stay open?

- Stay open, stay open.

And, the childcare providers have been wonderful to work with, because some of them have more childcare assistance providers.

Everyone likes budget stabilization, childcare stabilization grants.

- Are there other approaches that are out there?

- Then we're doing some other things.

The other thing, right now, when a person applies to be a childcare worker, they have to get fingerprinted, because that's a federal requirement.

For some facilities, sometimes, it takes three to four weeks.

Well, if you have a person's coming in for a 12 or $13 an hour job, they can't wait two to three weeks to get their fingerprint.

So, we have to address the crisis in fingerprinting, and there's a bill to make that better.

- How?

- The fun thing about that, is right now, just, finding a place to get fingerprinted is hard.

And so, we're going to set up 21 sites, all over the state, and so that somebody can get in, and there's standards that they have to be available within two to three days.

And then, that fingerprint, hopefully, will not have to be mailed to two to three people like it currently is, but actually directly electronically sent into BCI for testing.

- So, you can find out if there's anything in their background.

- Within, and the goal is to have it done within three to five days.

Minnesota and South Dakota both do it in less than five days, now.

- Yet, interesting.

There was a story out of Minnesota, that Moorhead providers are having trouble with fingerprinting, 'cause they have to send it to Fergus Falls, or to Perham, or something like that.

- Yeah, and, but generally, Moorhead, Minnesota's much faster than we are.

And so, that will help the workforce issue.

So, if someone comes to work, and they can get a background check in five days, then they could start work.

- Now, childcare has always been one of those interesting issues.

People know that it really is an issue, but there have been some resistance to putting state money into it.

But, is the resistance, is that crumbling now?

- The resistance, now childcare is seen as a workforce issue and because every, almost every chamber of commerce and every economic development initiative says we have to have workforce first, it has changed significantly in 10 years.

- Now, have you been in touch with the workforce committees and what they're doing?

Childcare is a big issue.

What are the other big issues in terms of workforce?

- I think in terms of workforce, the real issue is, we don't have enough young people in this state to fill over all our positions.

So, we have this huge dilemma.

We have to import workers And, what are the things that will import workers?

I think, today, we had a bill about allowing military to change their residency to North Dakota, and that will inspire them, perhaps, to stay here after their military time.

And so, I think we're looking at, how do we first bring people in, and how do we help them stay?

- And, of course, you've got the Mathern bill, which which talks about immigration.

- [Hogan] Immigration.

- And, there are two separate bills, in order to help workforce, because Senator Mathern has said, we have to look outside, not only the borders of North Dakota, but the borders of the United States.

- Absolutely, and, I think the immigration, the place where we find the most support for the immigration pill, is by farmers, and in Ag, because they have the H-2A or B visas, and they're used to having people come in from other countries to work.

And, really, the nursing homes, the hospitals are hiring many foreign nurses, and they have whole immigration processes.

If we could do a better job managing that immigration process, we could really, I think, bring people to work here.

- So, when we talked about workforce being an overreaching issue, it really is.

- [Hogan] It is.

- Takes a lot of work.

There's a lot of moving parts, and things are starting to come together a little bit.

- Well, and it's interesting, on every bill we hear in other committees, we have to ask the question, will this bill impact workforce?

So, every committee, did you know that was going on?

Yeah.

So, at the end of every hearing they say, "is this a workforce issue?"

And, we mark it "yes" or "no."

And so, all the bills are being tracked as their impact on workforce, at least in the Senate.

And so, we're really intentionally trying to think about workforce first.

- Now, that's, you see, that is extremely interesting to me.

Because, again, you're putting your money where your mouth is.

- [Dave] Yeah.

- On that.

- [Hogan] Mhm.

- Because, you want to make sure that these things fit together like a jigsaw puzzle, perhaps.

- Well, and workforce is east and west, urban, rural.

It, there are no internal boundaries.

It affects every single place in the state.

- Well, I have to go back to you.

You said you fell in love with an agriculture committee.

- [Hogan] I did.

- So, I have to ask you about one of the other over, could be an overriding issue, this carve out of the state's corporate farming law, that the governor's pushing, and some people are pushing, to get animal agriculture back in North Dakota.

How do you feel about that?

- Well, I'm generally opposed to corporate farming, particularly large corporate farming from out of states, and out of country because so much of our agricultural processing is controlled by the Chinese.

And, I'm opposed to that kind of infrastructure.

I think, one of the things we learned in, during Covid was we had a number of grants to expand our local meat processing operations, and those have been very, very successful.

Most of that expansion then became institutionalized, and we've got it embedded in our structure.

We had a bill this week about making livestock-friendly counties, and with the livestock-friendly county, it then encourages the county to look at how would they like to manage livestock.

And, not just the raising of the cattle, but also the processing.

And, if it comes from the bottom up, instead of from the top down, I think we can find solutions to have all the things we need for agriculture, in an environmentally safe way, that's friendly to communities.

- [Dave] So, grassroots efforts?

- It's really from the bottom up.

And, so I think, and I think the corporate farming bill, philosophically I'm opposed.

I know they're working hard at it though.

And, we wanna maintain our primary objective of family farms.

And so, perhaps, we're tweaking.

- I was gonna say, there might be some room, at this point.

- [Hogan] There is room for negotiation on this, at this point in time.

- Another thing that's out there is, the governor's big income tax proposal, to go to a flat tax, that, the details are still being worked out, the way I understand it.

1.5% versus the 2%, not quite as expensive.

What is your perspective on that?

- Flat taxes are regressive taxes.

They're not paid for by your ability to pay a tax.

And, we have, already, regressive taxes, because we have a high sales tax.

I think this move to a flat income tax, really benefits rich people, significantly more than it does poor people or middle class families.

And so, philosophically, I'm opposed to a flat tax.

- Well, what about property taxes?

Because, that's the big thing people complain about, is property taxes.

- Absolutely.

It's the number one.

And, most people don't think about their sales tax, because you pay it 2 cents at a time, or 12 cents at a time.

And so, we don't notice, where we get our property tax bill, and we see the bill.

That's the piece that's different.

But, I think sales tax people don't realize how much we're paying in sales tax.

I think the flat tax, the income tax, property tax issue, was homestead tax credit.

Did you see that bill we passed?

- [Dave] Mhm.

- The homestead tax credit, is, I think, the best way to help low and moderate income families pay their property tax bill.

And, I think there's strong support, bipartisan support, in both houses to make that one of the major issues.

And, then we have to fully fund education and other services at the local level.

- And, that's, there are efforts to do that at this point?

- Yes, absolutely.

- I mean, the human services, when they went to the state taking over the zones, that helped a lot.

- It did.

- And then, our education funding has gone up from the days when, I remember it was like 50%.

- And, we're at near 80% now.

But, we still have problems with transportation funding, special ed funding.

We have to look at the whole, and as long as the state has adequate funds, I think we need to use them.

Local government is the heart of most government.

And, we really need a stronger partnership between state and local governments.

- Again, it's not an easy fix.

It might be, you know, a fix that might come out over time, but you can't just snap your fingers and say, "this is what we're gonna do."

- No.

No, prob, and, and I'm, I've been concerned about the lack of local control, efforts to limit local control.

And philosophically, historically, the Republicans have been very strong local control advocates.

But, there's been a shift in that, to the state deciding everything.

- [Dave] Why do you think that is?

- I don't know.

I think it's a general distrust of government, whether it's state, local, or federal.

But, the things that, on the library boards, and telling school boards the things they can't and can do, I think local control, much more accurately reflects the values of that community.

And so, I don't think we need as much micromanagement as we're currently doing.

- I need to switch subjects again.

And, that this goes to the whole idea of changing the buckets.

This streams bill.

- [Hogan] Oh yes.

- And, this is probably the most complicated bill out of the session, about how do you spend legacy earnings.

Do you have any thoughts on that?

- Well, I think the thing that we need to separate is there, the in-state investment with legacy born money, I think we have to remember that our first priority is to maintain the body of the legacy fund.

And, there have been some efforts to, kind of, take that away.

And, I'm strongly supportive of maintaining the body of the legacy fund.

Now, how we use the buckets, whether it's the the SIF fund, or the budget stabilization fund.

We have so many buckets, that we sometimes, don't even know what, how much money we have.

And, keeping track of that.

We need to simplify the buckets and make them more strategic.

You know, I know they're moving one bucket from the property tax to the Prairie Dog Bill, Property Tax Relief bill.

But, and most, both of those really interact with local governments.

And, I think, that's an example of how you're pitting different groups against each other, at the local level.

- And part of this new Streams Bill or Bucket Bill, whatever you want to call it, there is now investment in research in the university system.

That is the proposal.

Whether or not it's going to survive till the end of the session, you know, we we're pretty early in this Stream Bill, but what do you think about that?

- I love the idea of research.

I think research is critical for all of our futures.

Whether it's Ag research, or economic development research, or energy research, we need to be a research-based state.

And, we have excellent universities, and I think we sometimes don't use them, as effectively as we could.

- I think that point was made in the hearing, by the two, quote, "research universities" and also by the other universities that say, "Hey, they're the research universities, but we're doing research too."

- They are, and, so many people are doing, even Career Tech, now, is doing research.

And so, we're seeing it in so many places.

And, I think, being recognized as a research-rich state, would bring people to live here.

- So again, workforce, - Workforce development.

- Yeah, workforce development.

So, that's the point I'm, I think we're both been trying to make, is how many things are intertwined here?

- They are, they are.

And, sometimes we often talk in committee about unintended consequences.

We start tinkering with something, that we think we're know what we're doing, and it ripples over here.

And so, those unintended consequences can really be dangerous.

- Since you're on human services, I have been dying to ask this question, and I just am trying to get my hand around, you know, the idea about, what happens in terms of behavioral health and, you know, moving it to communities like Dickinson, Williston, et cetera, while still keeping a state hospital in Jamestown.

That has become a lot more complicated the way I see it.

- I think it's not an either/or.

It's a both/and.

I think we need a state hospital, and the debate we had today was, what should that role be?

But, the exciting thing, with our rollout of expanded behavioral health, is that we're looking at adding inpatient units with the private providers, in both Dickinson and Williston.

So, we're trying to build the infrastructure at the local level, so that the state public institution is only used for the most severe situations.

And so, you have to do both simultaneously, because, right now, we have so much more demand than we have resources.

And, even if we had all the money in the world, I don't think we could recruit the staff to actually operationalize it, because in some ways we had grants out, RFPs out, that people never applied for because they couldn't hire staff.

So, sometimes now it's not money.

It goes right back to workforce.

- [Dave] Workforce again.

- Yeah, and behavioral health, the real thing that helped was telehealth, the fact that we have psychiatrists from all over the United States working in North Dakota now.

- But, things are looking up since the Schulte Report, which I think dates back to the mid-twenty-teens.

- [Hogan] Yep.

- And, they talked about.

- [Hogan] 2014, and 15, yep.

- And, also talked about the need for a new state hospital.

And, one thing that did surprise me, is in the governor's budget, he put 10 million for a study about what the state hospital should look like, I thought was interesting.

- Well, we tried to do it in the acute psychiatric committee this year.

to frame that out.

And, there were so many ideas that we really felt like we need a focused kind of architectural plan, like we did with the medical school, where we really had a group of 15 people working in depth, for a time, and looking at three alternatives for us to consider.

And, we're going to use the medical school model practice to design the new state hospital.

- And, that medical school is marvelous.

- It's marvelous, and we had three levels, you know, just remodel the old, or build something in between, or build a state-of-the-art.

And, we chose to build a state-of-the-art, which will last us for 50 years.

And, so we're going to do that same model with the state hospital.

- There's another issue I need to get into.

It's a little off topic, but, about state employees and benefits.

Now, this whole thing about defined benefit plan, or defined contribution plan for retirement.

- [Hogan] Mhm.

- That seems to be evolving, but evolving slowly, to me.

- It's, I'm not on any of those committees, so I'm not really up to date, but I think that's critical.

If we're going to retain any public sector workforce.

If we don't have defined benefits, the turnover will be every three years, and, it often takes three years to learn a job.

And so, I think if we wanna stabilize both, both the local governments and state governments, we have to keep defined benefits.

- Do you think that there is a realization among the people who are saying we need to change, change, change, now that maybe, - [Hogan] Now is not the time.

- Now's the time to change.

- I'm hoping.

Because you talk about workforce challenge, state government has workforce challenges.

Every government has workforce challenges.

So, this really affects public and private equally.

And, I think change, major changes in benefits right now, would be catastrophic.

- Now what about the pay plan?

I've been hearing some changes to the pay plan, but again, this all falls back.

The March revenue forecast will come out, and that will drive a lot of decisions, but it seems to be more generous than it's been in the past for state workers.

- It has, but yet the contracts, traditionally state workers got the same cost of living as public, as the contract for long-term care, for other entities.

And, in this governor's budget, they're not the same.

State employees got more than all the, kind of, budgets, things.

So, I think there's a lot of moving parts in the budget.

(Hogan laughs) - I think you're probably right.

But, again, this March revenue forecast.

- [Hogan] Well, we'll have - is going to really, tell a lot of tales.

- Well, and I thought the December budget revenue forecast was more generous than we thought it was gonna be.

And so, and I think right now the economy's more stable than it was, even in December.

- And that's good.

- [Hogan] That's good!

- Looking forwards.

- Yeah.

- But, of course, oil and agriculture are both very volatile at this point.

- They're, everything's volatile.

(laughs) The whole world is pretty volatile.

- That's true.

Well, I wanted to ask you, because I've asked other guests too, is there something that you're focusing on that we haven't talked about, that might be a, kind of, a hidden gem to watch?

- That's a great question.

You know, I think we're so focused on workforce and childcare.

I think all of the, kind of, bills, that are almost culture war bills, the transgender bills, the kind of library bills, are almost distractions from the heart of what we do.

And, I think, sometimes we forget that what we really are about, is looking at the common good, and those really aren't about the common good.

- Did it surprise you, the number of these transgender, or social issue bills that have come in this session?

- I've been shocked.

I've been shocked.

And I think the realities of it are, we wanna invite people and make them feel welcome.

We are frightening people and it's terrifying to me.

- Well, I haven't asked this question of anybody else, but I'm gonna ask it of you, would these have the unintended consequences, of maybe, scaring away potential workforce?

- Absolutely, this will.

In fact, I was at a meeting where two transgender people were saying they're looking at moving outta state because of the bills.

They, because, personally they feel threatened, and it's very, very hurtful to individuals, and to their families.

- So, this is going to be another one of those issues we're gonna have to watch through most of the session.

- [Hogan] Most of the session.

- I did, wanted to ask about a couple of relatively minor things.

One is this idea of taking the trigger off the oil tax.

- Ooh, I hadn't heard that.

(laughs) - Oh.

Well, that's being pushed in the house committee.

- Yeah.

That's an interesting idea.

You know, because remember when the trigger was the other opposite of what it is now.

And so, that's an interesting idea.

If we raised the oil tax, I'd probably do that.

(laughs) - But, I remember when it went from 11 and a half to 10%.

- [Hogan] 10%.

And then we would.

- With the trigger back to 11.

- Exactly.

So we just switched it around.

- And, what about this idea of carbon sequestration?

The carbon capture, the carbon pipelines that are coming through?

- I, you know, I have major concerns about the safety of all of this innovation, because we are really the center of the experiment about carbon capture.

Nobody else is doing it, quite like we're doing it.

And, I think there are risks, and, I think we need to assure that property landowners have rights protected.

I'm concerned about the Eminent Domain Bill.

I'm concerned about safety.

And, I think, historically, we have not been a regulated state.

And, I think, carbon sequestration has real risks.

- Okay.

Something to watch.

We got about 20 seconds left.

Here's the question I ask everybody.

When do you adjourn?

- Oh, day 78.

- You're saying 78.

You're a little bit less optimistic than some of your other.

I've heard.

75, 76.

- Oh, okay.

(laughs) - Well, thank you for being here, Kathy.

- Thank you - Appreciate it.

Our guest today on legislative review, Senator Kathy from Fargo.

She is the Senate minority leader for public and legislative review.

I'm Dave Thompson.

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