Governor unveils $14.3B budget

BISMARCK (AP) — North Dakota Gov. Doug Burgum unveiled a $14.3 billion budget on Wednesday that hikes state spending 5 percent, a surprising bump from the first-term Republican governor who had long signaled a thriftier proposal.
Burgum said his plan, presented to a joint session of the House and Senate, invests “in our economy, our workforce and the well-being of people” by offering pay raises for state employees and spending increases on education, human services and infrastructure projects.
The two-year spending blueprint also seeks to replenish more than $500 million of the $800 million in reserves that were used to balance previous budgets. The plan does not seek higher sales or income tax rates.
The proposal includes 4 percent raises in the first year of the budget cycle and 2 percent in the second, with a potential for an additional 2 percent if agencies meet efficiency goals. The budget is based on North Dakota oil prices fetching between $50 and $60 a barrel, and production remaining at 1.3 million barrels daily.
Workers also could get fully paid health insurance without having to contribute a share of the monthly premium under one of three separate proposed options. To keep their existing coverage, employees would be required to pay $28 monthly.
Burgum’s spending plan also would use $300 million of the interest from the state’s voter-approved oil tax savings account for education loans and grants, and funding for what he called “Legacy projects,” including a $50 million Theodore Roosevelt Presidential Library in western North Dakota.
North Dakota’s Legacy Fund holds about $6 billion. Lawmakers set aside $200 million of interest for the current budget, but Burgum has said he would not support using that money to balance the state books.
Republican and Democratic leaders in the Legislature said they supported Burgum’s general themes to boost state worker salaries, and increases on education, human services and infrastructure projects, but cautioned that they have yet to see details.
“It’s a good starting point,” Republican House Majority Leader Chet Pollert said.
The state’s current two-year budget, including federal aid, is $13.6 billion. That’s $600 million less than the 2015 budget that had more than doubled since 2009 with the rise of oil activity in the state.
Burgum’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.
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.
Burgum proposes general fund spending at $4.9 billion, up from $4.3 billion in the current budget, but $2 billion less than in 2015.
During his campaign for governor, Burgum, a wealthy former software executive, often talked about “reinventing government,” shaking up the “good old boy” party establishment and reining in “runaway spending” as the state’s oil boom faded.
In April, he ordered state agencies to slash budgets 5 percent or 10 percent, with the larger ones responsible for the bigger cuts. He also called for agencies to identify an additional 3 percent reduction as a cushion against commodity price swings. Additionally, Burgum called for a 5 percent reduction in agency staffing their upcoming two-year budget plans that he used to craft his plan.