Burgum to call for restrained spending in budget address

December 4, 2018

BISMARCK, N.D. (AP) — Republican Gov. Doug Burgum is going to ask the Legislature to rein in spending in the next two-year budget and to replenish state reserves that were used to balance previous budgets, an aide said.

During his address to a joint session of the Legislature on Wednesday, Burgum will discuss possible raises for state workers and a plan to invest interest from an oil tax-funded reserve account known as the Legacy Fund, which holds more than $6 billion, said his spokesman, Mike Nowatzki, who declined to discuss specifics of the governor’s spending priorities.

North Dakota’s coffers are fatter than had been projected due to record drilling in the western oil patch, with oil and gas revenue already exceeding expectations by more than $934 million in the current two-year budget cycle, state budget director Joe Morrissette said. Meanwhile the general fund’s revenue, which is funded largely by state taxes on income, sales and energy, is ahead of projections by more than $178 million, he said.

But the state’s economic picture isn’t all rosy. Despite the record production, oil prices have weakened in recent months due to oversupplied domestic markets and global uncertainty. And farmers are being hit with falling crop prices and lost sales overseas due to Trump administration tariffs imposed on key U.S. trading partners.

In April, Burgum ordered state agencies to slash their budgets by 5 or 10 percent and called for them to identify an additional 3 percent reduction as a cushion against commodity price swings. He also called for the agencies to reduce staffing by 5 percent in their two-year budget proposals, which he’ll use to craft his overall plan.

Republican Senate Majority Leader Rich Wardner and Democratic Senate Minority Leader Joan Heckaman said they didn’t know the details of Burgum’s spending plan. Both said they favor pay increases for state employees, who didn’t receive raises in the current two-year budget cycle.

Wardner said the recent drop in oil prices is a concern and “we may have to downsize a little going forward.” But he said he continues to receive big demands for spending, especially on roads, schools, public works and other infrastructure. He is pushing a $280 million plan aimed at rebuilding infrastructure projects in the state, though he said the governor hasn’t yet endorsed it.

Heckaman said she doesn’t favor any additional cuts to state government or “services that are needed across the state.”

The 2019 legislative session begins Jan. 3.

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