Friday, January 29, 2016

Updated State Revenue Forecast Could Impact County Road Funds

Governor Jack Dalrymple is expected to hand down an order for state agencies to make budget cuts Monday. That’s when the findings of a new state revenue forecast will be released.  State officials requested an updated forecast due to general fund revenues falling short of projections, hundreds of millions of dollars short. In order for the state to tap into the Budget Stabilization Fund to backfill for lost revenue, state agencies would first have to make across the board budget cuts of up to 2.5%. This is referred to as an allotment. 
So what could it mean to counties? Director of the Department of Transportation, Grant Levi tipped off county engineers that the budget cuts will more than likely result in a trimming from the “one-time” road funding non-oil producing counties are expecting to receive as a result of the passage of HB 1176.

 “The $112 million you were expecting to get February 1st will be impacted by the General Fund reduction. What I’m hearing is not “if” but “how much”, Levi told the group at the Association of County Engineers conference.

Any adjustment made in general fund reductions will be the same percentage those 2016 road funds will be reduced. The road funds approved early in the 2015 Legislative Session, through passage of the “Surge” bill, will not be impacted because those dollars were appropriated from the Strategic Investment & Improvements Fund (SIIF).    

Levi continued, “We are coming off a period of time of historic investments. Those were needed and future expenditures are still needed.”

Counties are already seeing budget impacts due to oil, sales and fuel tax collections being down. Levi said the Highway Distribution Fund is 13-15% behind projections. Those numbers coincide with a drop in truck traffic. Traffic volumes are similar to 2011.

The expected general fund reduction could also impact other county funds as well. NDACo will attend the review of the new revenue forecast and provide updates.

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