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Burgum's vetoes draws criticism by House leader, praise by Sanford

BISMARCK -- Gov. Doug Burgum vetoed several line items in the budget bill for the Public Employees Retirement System, along with parts of eight other bills.

Burgum’s office said the vetoes announced Wednesday, May 3, aimed to “reduce spending and protect executive branch authority and the flexibility needed to reinvent government.”

The line items vetoed in the PERS bill remove the early termination of the health insurance contract with Sanford Health Plan.

A point of contention between the state House and Senate last week was a provision preventing the renewal of a health insurance contract for the 2019-21 biennium. The bill requires that the PERS Board solicit bids for that period, with its primary bid being for a self-insurance plan.

PERS chose Sanford Health Plan as its health insurance provider in 2015. Although Sanford describes the agreement as a six-year contract, PERS officials have said it’s a two-year contract with two options to renew for two years.

Burgum’s message for vetoing that portion of the bill said “it’s an unproven hypothesis that a two-year, non-renewal contract period will produce lower rates from potential providers.”

House Majority Leader Al Carlson, R-Fargo, who had advocated for implementing a self-funded insurance plan, called Burgum’s veto “a huge mistake.”

Carlson said he was talking to legislative leaders to discuss the possibility of going back into session to consider overriding some of the governor’s vetoes.

“We worked really hard on trying to get a handle on all these runaway costs on health insurance,” Carlson said. “It’s going to slowly drive the state of North Dakota broke. I’m disappointed that he didn’t look further down the road as a businessman.”

Senate Majority Leader Rich Wardner, R-Dickinson, said he was still polling members of the Senate about the vetoes.

“There are some issues in there that some feel strongly about,” Wardner said.

He added that unless the Legislature has votes from two-thirds of members to override certain vetoes, it’s probably not worth coming back into session.

Regarding the PERS veto, the Senate did not support ending the contract with Sanford on June 30, 2019, but compromised in order to complete the legislative session with three days remaining of the 80-day limit.

“We were really not in favor of it, but we felt for the good of the legislative institution we could all live with it,” Wardner said.

Kirk Zimmer, executive vice president for Sanford Health Plan, said Wednesday he appreciates the governor’s veto that stops “an effort to sever a contract” between Sanford and the state.

“House Bill 1023 was very problematic for the health of the insurance marketplace because bidders on contracts want to be assured the they can count on the state honoring a mutually agreed upon set of terms within a contract,” Zimmer said in a statement.

Zimmer added that the 67,000 PERS members deserve the stability that Burgum’s action provides.

Burgum also vetoed provisions to establish a new legislative committee to oversee public employee health care coverage and a section that would have changed the scope of the Employee Benefits Program Committee.

Rep. Pamela Anderson, D-Fargo, who serves on the PERS board, said she didn’t like the provisions of the PERS bill that Burgum vetoed.

“These were good vetoes. I think that was good on the governor’s part,” Anderson said.

The PERS budget was among the final bills approved by legislators before they adjourned last Thursday. Burgum had 15 business days to sign bills delivered to the governor’s office within the last three days of session.

“We deeply appreciate the Legislature’s good work this session, evidenced by the fact I signed 430 bills with no line-item vetoes, including 43 appropriations bills,” Burgum said in a statement. “Where I did exercise veto authority, I did so to clearly delineate between executive and legislative powers and to prioritize spending at a time when fiscal restraint is essential.”

The 17 legislators who serve on Legislative Management would decide whether to convene the Legislature to consider overriding the vetoes, Wardner said.

Some of the other line item vetoes include:

  • Burgum rejected the creation of a legislative revenue advisory committee, saying it encroaches on the governor's constitutional duty and duplicates existing revenue forecasting efforts.

Carlson objected to Burgum vetoing a line item from the bill for the legislative branch of government.

“I think that’s a mistake for him to dig into our budget and do that,” Carlson said.

  • Burgum removed $16.1 million for townships in non oil-producing counties that was included in the budget bill for the Board of University and School Lands. The funding was added toward the end of a session in a compromise related to oil revenue distributions for western North Dakota townships.

Burgum said in a veto message that the $16.1 million for non-oil townships was approved without a full public hearing or demonstrated need. He added that it would be risky to deplete the state disaster relief fund.

  • Burgum vetoed an amendment to a bill introduced at the request of Continental Resources and the North Dakota Petroleum Council that stems from a dispute with the state over gas royalty deductions. The provision he rejected was “legislative intent” language that directs the Board of University and School Lands to apply a specific interpretation of terms in its mineral leases. A study of the complex issues remains in the bill.

Burgum signed a total of 440 bills, including 10 appropriations bills that contained a partial line-item veto. Three bills were vetoed in their entirety.

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