ND Gov. releases 2017-2019 budget plan

By North Dakota Office of the Governor | December 07, 2016

North Dakota Gov. Jack Dalrymple today released his 2017 to 2019 executive budget, a structurally balanced plan that reduces state spending, yet funds priorities without raising taxes. 

“We have produced a budget that is balanced and sustainable,” Dalrymple said. “We make the necessary budgetary reductions, while providing funding for education, statewide infrastructure improvements and other priorities.  Because we have taken steps in our prior budgets to protect against the eventual revenue downturn, we can fund our priorities and still carry forward healthy reserves with no tax increases.” 

SOUND FISCAL MANAGEMENT 

 Revenues Exceed Expenditures 

Ongoing Expenditures 

Dalrymple began the budget process by directing all but a few state agencies to identify targeted savings of 10 percent within their 2015 to 2017 appropriations.  In developing the 2017 to 2019 budget, another $60 million in additional spending reductions were made beyond the 10 percent savings target. The Governor’s budget calls for 268 fewer full-time positions in general government, and 315 fewer employees within the state’s higher education system. 

Overall, the 2017 to 2019 executive budget includes general fund ongoing revenues of $4.783 billion, while ongoing expenditures total $4.780 billion. The budget represents a 21 percent reduction in general fund appropriations compared to the current biennium, largely due to reductions in one-time investments that do not impact ongoing operations.

 Reserves for the Future

 

While Dalrymple’s budget utilizes some oil revenues to support the needs of a growing North Dakota, his budget plan leaves the state’s reserve funds significantly stronger on June 30, 2019. The budget calls for building the state’s reserve funds to about $6.32 billion by the end of the 2017 to 2019 biennium, an increase of nearly $1.2 billion compared to the funds’ projected balances on June 30, 2017. 

The 2017 to 2019 executive budget replenishes the budget stabilization fund, with a projected $454 million available July 1, 2017. During the 2017 to 2019 biennium, the legacy fund will increase to about $5.2 billion; the strategic investment and improvement fund will hold $332 million; and the balance of the foundation aid stabilization fund will total about $305 million. The state’s general fund is expected to carry over about $44 million into the 2019 to 2021 biennium. The Governor’s 2017 to 2019 budget does not propose using principal from the legacy fund, which will grow by nearly $1 billion during the upcoming biennium

Dalrymple’s budget calls for no new taxes, carrying forward unprecedented property tax relief and income tax relief. Since 2009 and through the current biennium, the state will reduce property taxes and income taxes by a projected $4.4 billion. 

STATEWIDE INFRASTRUCTURE INVESTMENTS

Though not as robust as investments made in public infrastructure during the oil boom, the Governor’s budget includes strong funding for highway and road improvements throughout the state, as well as flood control and water supply projects. Statewide infrastructure projects total nearly $1.3 billion. 

The executive budget includes $725 million for highway and road improvements; $319 million for flood control and water supply projects; and $24 million to honor state commitments for airport improvements.  Additionally, the budget includes a $200 million fund for school construction loans. 

Dalrymple is recommending an additional $70 million for flood control projects in the Mouse River Basin and to assist in home acquisitions.  Since 2011, the state has provided more than $315 million to support the region’s flood protection efforts.  To assist with Fargo-area flood protection, the executive budget includes $66.5 million, bringing the state’s total appropriations to $370.5 million. Another $11 million is designated for permanent flood protection along the Sheyenne River and for the continuing operation of the Devils Lake outlets. 

The Executive Budget also includes $30 million toward the Grand Forks water treatment plant and $125 million to advance the Red River Water Supply Project, the Western Area Water Supply Project, Northwest Area Water Supply, the Southwest Pipeline Project as well as other municipal and rural water projects. 

EDUCATION

K-12 education requires strong financial support even in times of lower revenue, and Dalrymple’s budget accesses the foundation aid stabilization fund to exempt the state’s K-12 schools from the 10-percent budget reduction. The executive budget calls for moving $140 million from the fund directly to foundation aid, which is less than what the fund is projected to receive in new revenue during the 2017 to 2019 biennium. 

The state’s commitment toward school aid and other K-12 support will total $2 billion during the 2017 to 2019 biennium. The state’s per-student payment will not rise in the first year of the biennium, but the Governor’s budget includes funding for a one-percent increase in year two. 

North Dakota has supported its higher education system in a major way, providing an overall increase of 26 percent over the past four years. The Governor’s budget continues to fund a portion of every student credit hour completed, but recommends a 10-percent reduction in general fund support, as well as further reductions of 5 percent that can be offset by an assumed tuition increase of no more than 2.5 percent per year across all campuses. 

Funding is also included in the Governor’s budget to replace the Communication and Fine Arts building at Valley City State University, which is in poor condition and located on the unprotected side of a new flood protection levee. 

HUMAN SERVICES

In the executive budget, the Department of Human Services is not held to the entire reduction required of other agencies. Despite growing caseloads and rising Medicaid costs, the executive budget provides for North Dakota’s long-term care facilities, veterans and the state’s vulnerable citizens. 

Long-term care providers and other care providers are also budgeted to receive a one percent inflationary increase the second year of the biennium. The Governor’s budget also includes funding to allow for Medicaid coverage of opioid treatment programs; funding to continue the Substance Use Disorder voucher program; and funding for a new childcare facility licensing and data system. 

Funding for Medicaid expansion, which is providing health care to 20,000 people across North Dakota, is included in the Governor’s budget. 

The Executive Budget also directs all tobacco prevention programming back to the Department of Health, and utilizes tobacco revenue to help pay for additional needs in behavioral health, Medicaid costs associated with tobacco use, and costs associated with other smoking-related illnesses such as lung cancer and heart disease.

During floods and other emergencies, our National Guard members always answer the call to duty, putting their lives on hold and their personal safety at risk in service to our state. Dalrymple said he supports a legislative proposal to pay the primary health insurance premiums for our National Guard members while they serve on active state duty.