Governor Orders Budget Cuts in Response to $1 Billion Revenue Shortfall

Gov. Dalrymple outlines revised revenue forecast

A revised revenue forecast shows the state’s general fund will have $1.074 billion less than predicted in March 2015.  To make up for the shortfall, Governor Jack Dalrymple is ordering state agencies to cut their budgets by 4.05 percent.  This allotment will equal $245 million. Additionally, $331 million in ending fund reserves along with $498 million from the Budget Stabilization Fund will be used to address the shortfall.

Dalrymple told the group made up of state agency leaders and legislators, “We did a lot of careful analysis and determined that 4.05 percent was the maximum reduction we could make without negatively impacting sensitive areas such as medical services and prison security.”

Dalrymple noted that the allotment is a short term adjustment in order to get to the next biennium. He told agency heads and legislators there will be ample time to make adjustments in the next budget which, will be delivered in December.

 “The goal of this allotment is to garner savings while minimizing impacts to services to the public, because of our strong reserves we can weather this downturn,” Dalrymple concluded.

Each agency will be informed of the dollar amount they are to cut from their budgets. They will have two weeks to notify Office of Management and Budget of where the cuts will be made. Salaries, operating expense, travel expenditures and one-time projects could be looked at. 

Counties will also see an impact from the budget allotment. The 4.05 percent reduction will also be applied to the one-time road funds counties are to receive for work in 2016. HB 1176 allocated $112 million to non-oil counties. That will now be approximately $107.5 million.  We anticipate NDDOT will shortly notify each county of their adjusted amount. 

The 4.05 percent allotment to general fund appropriations won’t affect the regular distributions of special funds to counties.  However, the State Highway Distribution Fund and the State Aid Distribution Fund are both seeing impacts due to the downturn in sales and motor fuels tax collections.  With the revised revenue projections now available, NDACo will be updating their county-level fund projections for counties.

Revised Revenue Forecast for February 1, 2016 can be found here:

https://www.nd.gov/omb/sites/omb/files/documents/public/revenue-forecast.pdf?ts=2016020113