Burgum unveils $15B budget, bonding for infrastructure
BISMARCK, N.D. (AP) — North Dakota Gov. Doug Burgum on Thursday unveiled a $15 billion budget that bumps state spending by 2% and includes a $1.25 billion bonding package largely aimed at funding statewide infrastructure projects.
Burgum presented his plan to a joint session of the House and Senate, saying it “invests in our priorities and maintains healthy reserves, all without raising taxes.”
The Legislature will take up the governor’s proposal in its next session, which starts Jan. 5.
The Republican governor’s budget is the second-biggest proposed by a governor in state history. Former Gov. Jack Dalrymple proposed a $15.7 billion budget in 2015 that eventually was whittled by lawmakers to $14.2 billion.
Burgum two years ago suggested $14.3 billion budget that raised state spending 5 percent over the previous cycle. The state’s current two-year budget, including federal aid, is $14.7 billion.
The governor proposes general fund spending at $4.8 billion, down from $4.9 billion. The general fund portion of the budget is spent on an assortment of programs, including education and human services. It is funded largely by state taxes on income, sales, energy, tobacco and gambling.
The governor’s suggested spending does not raise taxes on sales or income.
The GOP-led Legislature is fond of saying that the governor doesn’t control the state’s pocketbook and that it’s lawmakers who decide how much to spend on state government. The Legislature last session amended longstanding rules to essentially disregard Burgum’s budget proposal and instead use the Legislature’s previous budget as a starting point.
The move infuriated Burgum, prompting him to target fellow Republican Jeff Delzer, over Delzer’s opposition to him on budgeting matters.
Delzer, who heads the powerful House Appropriations Committee, said in an interview that Burgum’s budget suggestions will be considered fairly.
“His requests will be vetted and if they’re good they will be adopted,” Delzer told The Associated Press.
Burgum’s blueprint contains a performance-based 2% raise annually in the next budget cycle for state employees.
Even with the overall increase in state spending, Burgum’s preferred budget estimates the state will have more than $1 billion in reserves when the budget ends in June 2021.
Those reserves do not include the Legacy Fund, the state’s oil tax savings account that holds about $6.8 billion at present and is expected hold nearly $1 billion in interest earnings by the end of the next budget cycle. Voters enacted the fund in 2010. The fund’s principal has not been targeted but lawmakers have spent $455 million from the earnings since 2017.
Burgum wants to use earnings from the fund to pay for his bonding proposal, which includes $700 million to establish low-interest loans for political subdivision for roads, bridges and other construction projects.
Republican Sen. Majority Leader Rich Wardner has signaled a similar a bonding bill that would come from the Legislature, but he has not released details. Senate Minority Leader Joan Heckaman said Democrats will present a $1 billion infrastructure bonding proposal that also would use earnings from the state’s oil tax savings account to pay off the bonds.
Democrats are badly outnumbered in the Legislature, where Republicans wield supermajority control in both houses. Heckaman said Senate Majority Leader Rich Warnder has agreed to try to find common ground on the bonding packages from both parties and the governor.
For several years, the state rode a wave of unprecedented growth — and spending — due to generally healthy commodity prices and rapid oil development in western North Dakota to the point that it became the No. 2 oil producer behind Texas. The state budget has more than doubled in the past decade.
But the state’s economy has cooled with slumping oil and crop prices and effects of the coronavirus.
North Dakota lawmakers historically have shown little appetite for bonding, choosing instead to pay cash for projects or through haphazard funding, said Republican Sen. Ray Holmberg, chairman of Senate Appropriations Committee.
Burgum said the bonding package can save the state “tens if not hundreds of millions of dollars for the state and our political subdivisions over time versus waiting for years and years to pay cash for infrastructure.”
“Put it this way,” Holmberg said, “If you have to shingle the barn, do you wait two more years and have to pay a lot more money, or do you do it now?”