(lively music) - This is "Legislative Review" on Prairie Public, I'm Dave Thompson, thanks for joining us today.

Our guest on the program is Senator Jerry Klein from Fessenden.

He's the Assistant Senate Majority Leader.

Senator, thank you for your time today.

- Hey, great to be here, Dave.

- Well, let me just ask you about your job as the Assistant Leader.

What does that consist of?

- Well Dave, I think primarily it's managing the floor session, you know, daily, the front desk works out a calendar.

They run it by me seeing if this is the direction we need to go.

Some bills need to be brought to the top because they're important as they relate to something that we need to pass early and get it to the other chamber.

And so every day, shortly before we gavel in, I sit down, well, I stand next to the lieutenant governor who's the president of the Senate, our presiding officer.

And we kind of run through sort of just how you do it here.

When before you start your daily show, you run through what's gonna go on, how it's gonna go, what I'm gonna say, what motions are gonna be made.

And that's primarily what I do.

And just to keep the session going for that particular day.

- So when you say motions to be made, you're made aware of things like reconsiderations, things like maybe, what considerations can be made?

- Yes, there is, someone will say, "Look, I need to replace Meyer with Bekkedahl."

"I need to, this bill isn't ready for prime time.

"We found a glitch in the amendment.

"We need to bring it back to committee."

That would be, or someone will say, "Hey, I've got a floor amendment.

"How do I do that, Jerry?"

And we run through that process so everybody's ready to go.

We try to be as efficient as we can with our time.

And so it's always good to know some of those things in advance, but we try to work out the details so it works smoothly, it runs smoothly and everybody is comfortable with the motions that there needed to be made.

- Now, there was a bit of a change in procedure for your position because if I remember correctly, in the past, the assistant leader served on two committees.

- Well, early on the leader suggested that maybe he needs more help, maybe needs a little more support.

And if I wouldn't mind stepping off of my B committee, which, you know, A committees meet Monday, Tuesday, Wednesday, B committees meet Thursday, Friday.

So I'm like, "You know, well, let's see how that goes."

In looking back, I'm suggesting, I don't know how I used to squeeze all that other work in, but this has worked out quite well, I believe.

- So there is a science to herding cats, basically.

- Well, absolutely.

There's, there's, yeah.

Things work out for various reasons.

And in this particular case, they worked out well.

- So what is your role in terms of helping to set up conference committees?

- Well, the process is relatively simple.

If the House does not concur to an issue, a little sheet is made and it's brought back to the chairman of the committee.

The chairman then looks at the issue that the House, in our case the House, would've changed.

And we agree or we disagree, if we do not agree what they did.

There's a forum, three members are selected from that particular committee.

It's run through the majority leader.

Then it's run up to the desk and then we make the announcement on the floor as to who will serve with a light committee from the House on the various House bills.

- Now this session has had a number of bills.

So it's not that you're sitting around waiting for things to do.

There's a lot of work to do.

- You know, Dave, I think it does seem a bit different this time, you know, over the past few years it's always been like, hurry up and wait.

We are to the hurry up and wait stage.

But it's only been like the last two days or three days.

The calendar has had enough stuff to work on in the last two days.

We will have a short session at 4:45 today because we only had one bill left.

The House is only needed to act on a couple, and I think they're coming over, but we're to the end.

We have nine conference committees going, almost all dealing with appropriations.

You know, there's some ideas, some issues that have been resolved.

I know we are a little hung up yet on the human services budget which is our biggest budget at $5.5 billion or so.

Primarily most of it being federal money.

But we've got some issues hung up there.

So the Senate and the House are gonna have to agree so that we can get that going.

'Cause that, as you recall from last session was the last one of the, well, was the last bill to be heard, I think, late that evening.

- Yeah, that was the last bill.

And one of the other last bills is the Office of Management Budget bill which has been described as a Christmas tree or a kitchen sink bill.

- Absolutely, it's that cleanup bill.

As OMB, Office of Management Budget, deals with every aspect of government.

So every issue that needs to have some tweaking can come to that.

We find that there are some bills that were passed already.

We found that there's a word incorrect.

We find an appropriation number incorrect.

So that's gonna wind up, clean up there.

But it also is a low hanging fruit for people who are disappointed that their bill may not have passed and now they're gonna look to see if they can figure out a way to get that on onto the OMB budget which sometimes disappoints me.

- Yeah and of course, the Senate rules allow amending from the floor, which the House does not.

- It does, but not for any conference committees.

So you cannot amend a conference committee report or divide a question after it goes to conference.

So it does change things a bit.

However, I believe the governor has a little more latitude in finding sections in there that he can veto.

Should he find it that he seems it unnecessary.

- Well, let me talk about some of the big issues that are now kind of settled and one of the big things that has come to mind, it appears that tax breaks or tax relief has been settled.

- Tax relief has been settled.

The tax team worked over the weekend to try to come to some resolution.

They had, did I hear 16 meetings?

You know, the House was pretty clear that they wanted income tax relief.

The Senate's message was, we want property tax relief.

It took, I think it took a little intervention from the leaders to kind of suggest that we need to work together and provide some opportunity for both.

And so the, I believe the income tax proposal is around $300 some odd million.

Well, the primary residence $500 tax credit in this biennium is $104 million, I believe.

But that's only one year of the biennium.

So it would be a 204, similar to the $20 mill buy down that we had sent over to the House originally.

And then the homestead tax credit got increased by $53 million which is a program that seems to have worked well.

You know, our low income folks who are sitting in their home, trying to hang onto their House would have an additional opportunity to have their taxes reduced on their home.

- Well, let me follow up on that.

The Senate really took a stand on property taxes and that's where they put the flag in the sand.

House, as you mentioned, did an income tax thing.

Why the difference?

- Well, there's personalities.

You know, the House is, for any number of years, has worked hard or been on a mission to reduce income or totally eliminate what I believe is that third leg of our tax stool.

You know, once again we're income tax, we're sales tax and we're corporate tax which kind of puts that chair together so that, you know, we need that revenue.

But as the House continues to work at that, we continue to lower our rates.

I think the top one is 2.50 now.

And if you make $44,000, there would be, on the lower end, you pay no income tax.

So they've always leaned that way.

We worked since 2013 to do something with property tax and currently we're in the billions of dollars of what we think we have sent out in property tax relief.

The state doesn't collect property tax.

And I think people are confused about that.

That's a local tax, whether it's the school, whether it's the city, whether it's the county, the parks, the, you know, those are all local taxes that are collected.

And I've often told people, I said, "You gotta go to your city council meeting "if you're unhappy about the tax, "you've gotta go to your county commission meeting."

But oftentimes people just look to the state to say, "Well then, somehow it must be your fault "and you should try to fix it."

And in that respect and listening to those people, we've made some small attempts to do that.

- But that's the interesting point.

The state does not levy property taxes.

The only one the state levied, and I think it's gone now is the mill for the med school.

Correct?

- That was proposed to, that was a constitutional, that was something that the House didn't agree with the Senate.

I don't recall exactly, Dave, on that, but that is the only property tax issue that the state deals with.

So when people say, "You know, we gotta eliminate property tax," I often say, you know, "That's local."

If you want your city to have a new payloader or the county to have a new blade, do you really wanna come to Bismarck and ask for that?

Should we ever eliminate the property tax?

And I think we, I prefer local control as much as we possibly can.

And so we've gotta be more involved locally if we really want to take a look at what we're doing at that level.

- I don't want to prolong the point too much, but the proposal that Senator Shibley had, which was to use the required mill levy that a school has to levy to reduce that and that's immediate property tax relief.

That didn't get any traction in the House?

- Well, you are absolutely right.

Senator Shibley's proposal was just to kind of piggyback to the proposal that we did in 2013 which is what brought down over a billion dollars with a property tax relief, you know, there's some concerns that the local taxing districts backfilled that somehow.

And that you didn't get to see any property tax relief or if you did, it was just a very brief period of time.

Maybe one year or two.

But I guess we could argue that look where the cost of anything has gone in the last 10 years.

You know, I think of just coming to the legislature 27 years ago and you know, our hotel reimbursement was $600 which now would be, it's totally was way, well it was way too low then.

And of course now, we are following this GSA rates and it does, things change.

And it changes for the counties, the cities, the state.

Look at all those inflation factors that we're trying to do.

That's why we're doing the six and the four for state employee pay raises.

'Cause we've gotten a little behind here during this last major inflationary period.

- Now that is the thing that there was a lot of focus on that is to get that six and four for the state employee, 6% the first year, 4% of the second year as a way to help catch things up and also to try to address inflation.

- Absolutely, I think early on, there was some discussion that was kicked around, we needed a placeholder early on and we'd start with the four and four thing and then after the second budget forecast or economic forecast, we saw that there was gonna be a little bit of additional revenue that helped us kick that extra 2% up.

You know, and we do still pick up the entire employee's healthcare ticket, so to speak.

And that, by the way, that doesn't go down either.

You know, those amounts are some millions of dollars.

So I think overall we've got a fairly decent package but like anywhere in North Dakota, like anywhere in America, in fact we were traveling a across the ocean.

Everybody's looking for help.

And so that it's a very competitive sort of environment that we're currently in.

And so we've gotta try to stay close.

So the six and four, hopefully we can provide an opportunity for people to wanna stick around.

- Now I'm glad you brought that up Senator because one of the overriding themes going into the session, workforce development, workforce is a real problem.

We need to find a way to attract workforce to North Dakota or to get people back in the job market.

How do you think the legislature has done so far in that?

- Well, you know, Dave, I think we've done a fairly, you're never gonna do the best job you can.

I think we've made a lot of attempts to take care of some of this licensing stuff where somebody who has worked in another state in a particular field comes to North Dakota.

Now they have to go through this licensing process.

They can't get licensed here 'cause they have maybe different training requirements, different work requirements, different educational requirements.

We're trying to make, create some sort of uniformity.

So we made some attempts in doing that.

You know, the workforce thing, you know, we did, I think we have passed now on both sides on the childcare issue.

It's gonna be 60 some million dollars to try to help these people who have decided that they should stay home because it's not worth going to work because my childcare is so expensive or I can't go to work because I can't find childcare.

So this was all part of that whole workforce development thing to maybe we can provide some help.

You know, some could argue and some have argued that, you know, maybe mom or dad should stay home with the kids.

Maybe that would help us in the long run.

But at this point in North Dakota, I think it's workers and people have to make those judgements.

They have to make, parents have to make that call.

But if this helps provide them some sort of ability to go to work and knowing that, you know, once you're, if you leave your job and you're in a career, if you take X amount of years off to stay home, you've held yourself back a bit.

So this may help people who have, are career driven.

So we'll just have to see.

But I think we made, that was the key.

The workforce development committee was formed.

A lot of our bills were supposed to be signaled that this helps workforce.

And so, you know, I think we've made as good of attempt as we could.

And I think we've corrected some of those things.

- You know, you've mentioned that and it was always, it was jarring at first when I'd sit in an appropriations committee hearing in the Senate and Senator Bekkedahl would say, "Okay, does this relate to workforce?"

Apparently there was a reporting mechanism.

- Every committee was supposed to, as the motions were made, and this helps workforce.

And you know, if you look at the committee report, it was on each and every one, even if the motion wasn't made properly.

Because, you know, having been here a lot of sessions and working through the system, you maybe get, you do things the way you used to or always did.

And so some of those motions may not have been made properly.

But the whole idea is how does this help workforce and can we compile all those things to show that citizens that there's an opportunity out there that we fixed this or did this or helped them with a board.

And people can still reach out to legislators 'cause you know, sometimes boards do what boards do, they respect the people they support, they serve.

And so sometimes you get caught up in a glitch and sometimes we can help work that through.

- Would you say that the legislature kept their eye on the ball when it came to workforce, then?

- Well, I like to think that, you know, we've played a good first half.

I think the next session will just kind of maybe continue to work on that and bring those things together so that we can continue to move.

And you know, we've created this support person now at the Department of Commerce or persons.

There's a lot of, we learned of a lot of folks who are trying to come to America or to North Dakota legally.

We know that our healthcare institutions are working with people who are bringing people here legally.

And is there a way to help businesses through an agency that can say, "Hey, if you're looking for somebody, "I know where we have some legal immigrants to come here "and to help you."

I know we've talked a lot about the Ukrainians now coming to work in Western North Dakota in the oil rigs, you know, those programs.

But as a small, former merchant, you know, we sometimes don't know where to go.

And hopefully we've created like at least a place to call somebody and get some information.

- So the proof is going to be in the pudding.

But it looks like it's set to have proof.

- I think the recipe has been followed.

It's all in the cake has been made and now we have to bake it and see how it's gonna turn out.

But I think we're on the right track.

- Another one of the big issues that was talked about from almost the get-go was the retirement plan for new state workers and the legislature has now passed a defined contribution plan and will close the defined benefit plan to new hires starting in 2025.

In 2020 hindsight, was that the right move?

- Well, you know, we can always, you know, in the next 10 years we'll look back and say, "Wow, that was a great idea."

Or, "Wow, what were they thinking?"

I think what we know is that in the last number of sessions, we've been all trying to figure out what to do to save our retirement program.

And last interim, the committee worked really hard to develop a plan because this $1.8 billion upside down program, we've gotta figure something out.

It was a couple of proposals.

One was the Senate bill to provide more money from running the system the way we did now.

But the new proposal that came from the House and was pretty overwhelmingly supported in the House, was to go to this defined contribution to create a program where only new employees, current employees are in 'till the day they retire.

But the new employees now will be on a defined contributions, an opportunity to have portability, more involvement in your program.

You pass away and you've got a retirement package.

You don't take the package to the grave, you hand it off to your next of kin.

So I think we're gonna have to see how that all goes.

You know, I was somewhat supportive of that only because we've gotta, we had to take a different direction.

But when I knew that it was not going to hurt any one of our current employees, that they should feel comfortable and confident and know the old program is not gonna go broke, the state will be behind it.

So, you know, there is should be a peace of mind for the current workers and I think the future workers who are, we find now, too, that there's another statistic, Dave, you probably know that the day of Joe's starting at the capitol and working 30 years, it doesn't happen anymore.

We've learned that the new, young workers are moving around, finding different opportunities.

Especially now in this new environment that we're in where, you know, wages continue to kind of accelerate.

People are stealing somebody from the, you know.

It's not like we're creating a bigger workforce, we're just shuffling the people around.

- So the proof will be in, if this works, to attract the younger workers who at least will stay for a few years and then maybe look at something else.

And that's just the way the world.

- Yeah, I think that's the way the world is.

I think the, you know, there were some who'd suggest, should this be the burden of the taxpayers?

And that's, it is now, it will be for the next few years 'cause we still have that 1.8 billion unfunded that we're gonna have to make sure, the way I understand it, make sure that those people are taken care of.

That that remains, those folks are, that program remains solvent to take care of everybody that's currently in it.

So yes, it's gonna be, it's another what we believe is an advantage.

I think it will turn into an advantage when we're trying to recruit new workers.

- Now on a different topic entirely, that there's been a kind of a change in how highways are gonna be funded in North Dakota because gas tax is not living up to it with new gas cars that are much more fuel efficient, electric cars coming in.

There are another ways that the legislature's looking to help match federal highway dollars, correct?

- Ah, yes.

We're falling a bit behind.

If we wanna make that federal match which is really critical to keeping our roads, our bridges, our state highways, our federal highways up and running.

We've had to figure out different ways to fund that.

One of the issue, one of the ways is we've redirected some of the streams money.

Today, we carry that 1379, which has a stream of, hmm, I can't remember $100 million.

- Something like that.

- It's a lot of money to help the DOT, Department of Transportation match those federal dollars so we can continue to keep our roads up and running and improved and, you know, of course this is the time of the year where you complain about the potholes, you complain about all the bumps.

Where the barrels are starting to come out here on State Street and there's gonna be a lot of action there.

So those, and then we did some additional help for the townships.

The counties and townships have been asking for help for the last, for a while.

And you know, as those costs of repair and replacement continue to grow, I think we've made some strides this session to give them some opportunity to have additional revenue so we can get some more of that work done.

- So in about the minute we have left, what are the sticky wickets left?

- Well, I think the stick wickets is the, like I said, the Department of Human Services budget.

There is some concerns about Medicaid expansion.

The Senate likes it, the House, well, everybody understands it, but how much of that do we want to fund?

You know, I think there's gonna be a, I think there's gonna be consensus and the rest, most of the rest of the things we're working hard to understand why some legislators put their pet projects in and to have them explain why this is almost utterly, the most important thing that'll ever come.

But, and so working those through those things, I think today, by this evening, most of that'll be worked out and we should be on the right track to hopefully, we can get 'er done tomorrow night.

- Well that's great, Senator.

Thank you for your time.

It goes very fast.

- It did go very fast, Dave.

- Our guest Senator Jerry Klein from Fessenden.

He's the assistant Senate majority leader.

For Prairie Public, I'm Dave Thompson and just a shout out to Matt Olien who hosted the last two weeks for me.

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