North Dakota Legislature could reconvene after $35M mistakenly cut in line-item veto

The North Dakota Legislature could return for a special session after the Governor's Office on Thursday acknowledged a mistake that unintentionally scrapped $35 million in funding for housing and homelessness programs. 

When Gov. Kelly Armstrong signed the last bills of the session on Monday, he line-item vetoed seven items in six of the final bills. The governor is able to use a “line-item veto” to eliminate individual sections of appropriations bills without vetoing the bill in its entirety.

While marking up Senate Bill 2014, encompassing the Industrial Commission’s budget, the Governor’s Office intended to eliminate a $150,000 passthrough grant to a Native American-focused organization to hire a homelessness liaison. Instead, officials somehow crossed out the entire section, including $25 million for housing projects and programs and $10 million for homelessness assistance during the 2025-27 biennium.

There is some irony in the veto error, as Armstrong has said an overall lack of funding for housing programs this session was a “missed opportunity.” 

“I think the housing assistance money and the rental assistance money that got left on the table is something that I wish wouldn't have,” Armstrong told the Tribune on May 15.

To add to the irony, the Industrial Commission, which the governor chairs, interviewed candidates to be the executive director of the Housing Finance Agency on Thursday. The agency is the state entity that oversees the Housing Incentive Fund –- where the $25 million was accidentally cut from.

Housing Finance Authority Executive Director David Flohr said the agency had not spoken with the Governor's Office about the loss of funding yet and did not have a comment at this time.

A meeting was held Thursday morning to determine if there is a way to correct the mistake without bringing the Legislature back for a special session. The governor cannot rescind a veto, according to a 2017 ruling of the North Dakota Supreme Court.

“Governor’s office staff met with Legislative Council this morning to discuss options for correcting our markup error on SB 2014 to reflect the clear intent stated in the line-item veto message,” Armstrong said in a Thursday statement. “If necessary, we will call the Legislature back to ensure the appropriate funding is delivered, but we hope to avoid the expense of a special session. This was an honest mistake, and we will fix it.”

Legislative Council Director John Bjornson said the cost of calling the Legislature back for a special session would be roughly $65,000.

If the Legislature is called back for a special session there are two ways lawmakers could fix the error. The first would be to simply vote to override the governor’s veto, which would save the $35 million but also leave in the $150,000 the governor sought to remove with his line-item veto. This method would likely take one legislative day.

Alternatively, if the governor wished to leave out the $150,000 he targeted with his line-item veto, the Legislature could leave the veto as it is, then craft and pass a bill that reappropriates the $35 million. This would be a longer process than a simple veto override vote and could take several days.

Bjornson said fixing the error without a session poses challenges.

“If there were some alternative solution, you need to ensure that it would survive legal scrutiny if anybody were to challenge the reinstituting of $35 million into the budget,” Bjornson said. 

He said an alternative solution agreed upon by Legislative Management and the Governor's Office that avoids a special session could set a dangerous precedent where a future governor, in “two or 20 years’ time,” could work with legislative leaders to change a bill after the fact to make it consistent with their stated intent.

“It's the risk of setting a precedent where a small number of legislators would be agreeing with the executive to do something that the entire body may not necessarily be in alignment with,” Bjornson said. “We'd all like the easy solution, but sometimes the easy solution comes with consequences now or much later even.”