Article X, Section 26 of the North Dakota Constitution covers the Legacy Fund and states “Thirty percent of total revenue derived from taxes on oil and gas production or extraction must be transferred by the state treasurer to a special fund in the state treasury known as the legacy fund.” Taxes on oil and gas production and extraction therefore represent the bulk of the additions to the Legacy Fund. The legislation further states that other sources of revenue can be put into the Legacy Fund, but at this time I am not sure if that ever happened. The additions into the Legacy Fund then are an interesting topic in their own right.
The additions display some variation over time as you can see above. The data start after the oil bust started so it is not surprising to see the early decline in the contributions to the Fund balance, though it clearly does recover and then start to increase. Perhaps the most notable things that the lowest level of monthly contribution is $20 million over this time frame. I wanted to see if there was a particular seasonal pattern to the data as well.
The ups and downs within certain months are really notable, especially July, August, and September. The horizontal blue bars are the average for the months, which interestingly enough, are pretty stable between $35 million and $5o million per month over this time frame. Now the Fund increased significantly over this timeframe so a legitimate question, given the (somewhat) stability of the contributions. This looks like the following:
The decline of the contributions as a percentage of the amount is not a surprise given the increase in the Fund balance. However, it is good to realize where we stand in terms of what the new contributions look like. They are significant dollar additions, but smaller percentage increases, except from around July of 2017 to the end of 2018. The additions represented a notable increase in percentage over that time frame. Yet another piece of the puzzle to consider as I try to think about the pieces of the Legacy Fund.