Doug Burgum’s biggest challenge in North Dakota since entering politics may not happen on Election Day.

Source: Mike Lee, E&E News reporter • Posted: Tuesday, November 8, 2016

Burgum, a 60-year-old businessman who became a multimillionaire after selling a software company to Microsoft Inc. 15 years ago, upset a field of veteran politicians to win the Republican nomination for governor. He’s heavily favored to win against Democrat Marvin Nelson and Libertarian Marty Riske.

The hard part may start if and when he takes over the governor’s mansion, as the state confronts a string of stubborn problems. The oil bust has cut state revenues by about one-fourth in the last 18 months, and more bad fiscal news could be coming. And a series of protests over the Dakota Access pipeline have pitted Native Americans and environmentalists against police and sheriff’s deputies in the eastern part of the state.

Burgum has said in campaign ads and televised debates that he has plans to balance the state budget and diversify the state’s economy, though he has given few specifics.

“I’m not certain how much we can gauge his policy by his campaign ads,” said Mark Jendrysik, a political science professor at the University of North Dakota.

Burgum grew up in the small town of Arthur, N.D., where his family ran a farm and a grain elevator, he said in a debate televised on Prairie Public Broadcasting. His father died when he was in high school, and he attended North Dakota State University and earned a Master of Business Administration from Stanford University.

In 1983, Burgum took out a loan against the family business to help finance a software startup in Fargo, N.D., that grew into Great Plains Software. In 2001, Microsoft bought Great Plains for $1.1 billion, and Burgum worked as a senior vice president at Microsoft until 2007.

Since leaving Microsoft, Burgum has operated the Kilbourne Group, a real estate company that has renovated buildings in downtown Fargo, and Arthur Ventures, a venture capital firm that invests in tech startups, according to his campaign bio and the company websites.

Burgum jumped into the governor’s race after Gov. Jack Dalrymple (R) opted not to run for another term. He beat state Attorney General Wayne Stenehjem, who has held various state offices since 1976, and two other candidates in the Republican primary in June (E&E Daily, June 15).

By then, the state’s challenges were beginning to coalesce. A month after the primary election, Dalrymple was forced to call a special session of the Legislature to cope with the downturn in the oil industry. The drop in oil prices has left North Dakota’s revenue about 25 percent below what was projected for the current two-year budget cycle.

When legislators arrived in Bismarck for the session in August, members of the Standing Rock Sioux Tribe erected a teepee on the lawn in front of the Capitol to protest the construction of the Dakota Access pipeline.

The pipeline would carry up to 570,000 barrels a day from the Bakken region to refineries and other pipelines in Illinois. It’s not on the Standing Rock reservation, but tribal members are worried that it could pollute the reservation’s water supply and disturb burial grounds and other artifacts on private land.

Since then, hundreds of tribal members and other protesters have been arrested in a series of demonstrations aimed at stopping construction of the pipeline. In September, the Obama administration blocked construction of the pipeline across Lake Oahe on the Missouri River while the Army Corps of Engineers determined whether it should reconsider its decision allowing the project to cross over the river (E&ENews PM, Sept. 9).

Burgum’s staff turned down an interview request. In the October TV debate, Burgum criticized the Obama administration for blocking the pipeline. He said he had visited the site of the protests and spoken with Standing Rock tribal Chairman David Archambault II.

“This is an opportunity for further dialogue,” he said.

On the state budget, Burgum said he’d like to limit future capital spending, since most projects like roads and buildings come with a long-term maintenance cost. He also said the state needs to reform the way it projects its revenue, to avoid being caught by sudden downturns in oil prices, and touted the idea of zero-based budgeting.

In a zero-based budget, state agencies have to justify their existence and eliminate any unnecessary expenses.

The businesslike approach may not work in state government, Jendrysik said, particularly if it leads to job cuts. North Dakota is a small state, so asking legislators to eliminate jobs means asking them to fire people they’re likely to know.

And negotiating with the different sides in the pipeline protest may prove difficult, too. Neither the Standing Rock tribe nor the company building the Dakota Access line responded to requests for comment.

There may be one bright spot for Burgum. Since 2010, the state has been socking away part of its oil tax revenue into a long-term trust called the North Dakota Legacy Fund. The fund has grown to more than $4 billion, the Bismarck Tribune reported in September, and state law allows the Legislature to begin spending some of the fund’s investment earnings starting in 2017.

One potential use for the Legacy Fund is diversifying the state’s economy, which Burgum has touted on the campaign trail. His Main Street Initiative calls for investing in infrastructure to create dense, walkable towns, which could help attract new businesses.

As with any public funding, though, Burgum will likely have to negotiate with legislators and interest groups. Al Carlson, the House majority leader, said budget writers should be “very cautious” in spending the money.

Meanwhile, local economic groups like Vision West ND have been working for years on projects to help diversify the economy in the predominantly rural western half of the state, said Deb Nelson, one of the group’s organizers.

“We’re hoping they listen to those of us who already have some plans in place [and] support those plans already being developed,” she said.