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Minot legislators see mixed bag in governor’s budget

Flood control for Minot and a general belt tightening in state spending are among features of Gov. Jack Dalrymple’s proposed 2017-19 budget that Minot legislators welcome.

They still see the budget being ripe for revisions, though, and expect incoming governor Doug Burgum to do some of that himself.

“We are going to work it over hard over the next 80 days starting Jan. 3, but it’s a starting point,” Sen. Randy Burckhard, R-Minot, said of the $13.4 billion budget released by Dalrymple during a budget address to the Legislature Wednesday.

“It’s a budget that we will definitely be working on. There will be changes to it,” said Sen. Karen Krebsbach, R-Minot. “I expect to see a lot of changes from the new governor.”

Krebsbach said the budget cuts made this past biennium as oil prices took a dive will influence how legislators approach the new budget.

“I am sure there will be more caution in using any budget figures that are optimistic, not that we want to be pessimistic. Yet I think we are going to be very cautionary,” she said.

Rep. Roscoe Streyle, R-Minot, said the final budget is likely to look drastically different. Other than Dalrymple’s proposal to remove the tobacco prevention program from the Department of Human Services and make it a function of the Health Department, he didn’t see much he liked in the budget.

“We are making the general fund more dependent on oil revenue,” Streyle said.

Streyle questions the amount of Bank of North Dakota profits that Dalrymple proposes spending and also disagrees with spending interest on the oil-tax collections in the voter-established savings account known as the Legacy Fund.

“It’s too early to start down that road,” he said. “That should be just allowed to grow. Re-invest the interest for now.”

The governor proposed spending interest, but not principal, from the Legacy Fund. Dalrymple expects an estimated $1 billion in oil taxes to come into the fund and replenish the spending during the biennium.

Streyle also believes Dalrymple’s cuts, including employment numbers, didn’t go far enough.

“There was a fair amount of FTEs cut but I think we are going to have to go significantly deeper,” he said.

Sen. Oley Larsen, R-Minot, said he is pleased voters approved Measure 2, expanding the spending authority from the Foundation Aid Stabilization Fund, because it will protect education funding this session. On the other hand, he’s leery about spending from the Bank of North Dakota and from savings generally, which gives him mixed feelings about the budget.

“I can live with some parts of it. The part where we are talking about spending money in the hopes that the coffer will fill, I don’t feel comfortable about that,” he said.

Rep. Andrew Maragos, R-Minot, said he can support the Legacy Fund spending, calling the proposed budget a common sense approach to belt tightening.

The budget also funds health insurance premiums at current levels for state employees while holding pay raises to 1 percent and only in the second year of the biennium.

“It’s a bare-bones increase without a doubt,” Maragos said. “If and when the funds become available in the future, we can play catch up again. Everybody in North Dakota has to tighten their belt a little bit. I think the employees will be somewhat understanding.”

Rep. Dan Ruby, R-Minot, said he was pleased the governor was able to balance the budget without new taxes. However, he wants to look further into whether the amount of Bank of North Dakota profits used is appropriate. He’s also hesitant about the Legacy Fund spending.

“My preference would be that we don’t tap into that money,” he said.

He also wants to further investigate the change in property-tax relief. Rather than the usual 12 percent buydown of property taxes, Dalrymple proposes the state pick up the cost of county social services, providing $23 million in property tax relief through elimination of the counties’ 20-mill levying authority. The tax relief will equal or be greater to the 12 percent buydown, Dalrymple said.

Ruby said he also would want a long-term plan in place to avoid seeing property taxes climb again over time.

Souris River flood control, which received $40 million last session, is budgeted at $70 million for home acquisitions, the first three phases of construction in west Minot and flood control measures in rural areas.

The request from the Souris River Joint Board, which is managing the Mouse River Enhanced Flood Protection Project, was $20 million for acquisitions and $51 million for the construction and design of further work in Minot and Burlington.

Dan Jonasson, Minot public works director, said the proposed budget would enable the project to proceed as planned. A half percent sales tax from Minot is providing the 35 percent cost-share. Jonasson said the city will have to look at funds available from the sales tax to determine whether any bonding will need to occur.

The governor’s budget also includes $125 million for municipal and rural water projects and $95 million for water systems that include the Northwest Area Water Supply Project.

Higher Education would see a 15 percent cut. Five percent of the cut could be made up with a 2.5 percent tuition increase each year of the biennium.

“When you have to make a correction in the budget like we are going to have to do, there’s going to be some proverbial pain,” Burckhard said of the tuition increase.

Kelsey Buchholz, Minot State University study government vice president, said it is too early to say how a tuition increase might affect students.

“But any increase is always met with some concern,” she said. She added an increase could particularly affect international students.

“We have seen an increase in international students in the last couple of years, and we wouldn’t want to see anything happen to deter those students from coming back,” Buchholz said.

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