Dalrymple Strongly Recommends Legislators Pass Social Service Funding Proposal

A top priority item for North Dakota counties received strong support from Governor Jack Dalrymple Wednesday, December 7, as the governor included state funding for county social services in his executive budget. Dalrymple presented his budget for the 2017-2019 biennium to lawmakers. 

Dalrymple “strongly recommends” that the Legislative Assembly support the bill to eliminate the 20 mill authority for county social services that can be levied on all property owners in North Dakota. State funds would be used in replacement of property tax dollars.

Photo Courtesy: The Bismarck Tribune

“Four years ago and two years ago legislative leadership said that we were not ready to make this change. They were right. A comprehensive formula for county social services reimbursement has taken one and a half years to develop with the help of county and state professionals,” Dalrymple told lawmakers.

Dalrymple focused on this proposal as the mechanism to deliver real, permanent property tax relief. “It requires that the new property tax relief formula for county social services always produces property tax relief at a level no less than the 12 percent county tax buy down, which was implemented four years ago. In some counties the amount of property tax relief will actually be greater than the 12 percent buy down. The best feature is that this formula is built into our ongoing expenditures, is driven by each county’s actual workload and becomes a permanent means to property tax relief over the long haul. There will no longer be any need for a special fund dedicated to this form of property tax relief.”

Dalrymple touted the great achievements North Dakota has made in lowering taxes. The total of tax relief since 2009 now totals $4.4 billion.

Other points to highlight from Dalrymple's budget: 
- Total General Fund spending is down 21 percent from current biennium
- Reduction of 583 full-time employees
- Agencies required to cut 10 percent from budgets (with exception of DHS, DOCR and Highway Patrol) an additonal $60 million in cost savings was also identified
- $1.3 billion to state, county and tribal governments for infrastructure needs 
- Reserves expected to grow $1.1 billion to $6.3 billion

Dalrymple Recognizes Law Enforcement during Budget Address

Photo Credit: The Bismarck Tribune

North Dakota Governor Jack Dalrymple shifted gears during his budget address December 7th from talking numbers to recognizing the great efforts by North Dakota’s law enforcement in responding to the Dakota Access Pipeline protests.

“Let me just say that the performance of our National Guard, our Highway Patrol and other local law enforcement who have faced incredibly tense and life-threatening public safety challenges over the last 130 days has been awe-inspiring,” said Dalrymple.

The Governor acknowledged that many of the individuals who have been assisting Morton County with the protest situation have gone months without a day off. More than 1,400 individuals have assisted Morton County in the DAPL protest response. Law enforcement have come from 31 counties, 22 cities and 9 states.

Dalrymple told lawmakers, “We have had no choice but to step up and cover the expenses of maintaining public safety throughout the ordeal.”

The funds borrowed thus far total $17 million which will have to be repaid from state reserve funds.

Dalrymple publically thanked Morton County Sheriff Kyle Kirchmeier, Highway Patrol Superintendent Mike Gerhardt, and North Dakota National Guard Major General Al Dohrmann. The three individuals were asked to stand and be recognized. Lawmakers and all those in attendance gave the men a standing ovation.

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Governor Jack Dalrymple to Present Budget Address December 7th

North Dakota Governor Jack Dalrymple will present the Executive Budget and Revenue Proposals for the 2017-2019 biennium. Dalrymple will provide his budget address December 7th at 10:00 a.m. This will be Dalrymple's last legislative address, as he did not seek re-election. Doug Burgum will become the 33rd Governor in North Dakota when he takes office December 15th.

ND Legislators Pass Budget Bill in Special Session

It was a historic moment. But not a moment you really want to experience. For only the 15th time in state history - the North Dakota Legislature was called in to a special session. They were asked to pass a bill created to bridge a budget gap created primarily by the plunging oil market. Yes, it was a moment Legislators hope they never have to repeat.

You may remember in February, Governor Jack Dalrymple ordered across-the-board reductions of 4.05% to state funded agencies. That allotment simply wasn't enough to make up for the decrease in tax dollars flowing into the general fund. The Governor can only authorize across-the-board cuts. He needed to call the Legislature back to work to approve more targeted reductions and to tap other funds.

The three day special session focused only on fixing the budget. The Governor and leadership crafted the bill and while others had their own ideas on how to improve it - those concepts were not adopted.
The bill makes an additional 2.5% reduction to state agency budgets; with the 4.05% that was authorized earlier in the year - state agencies are ordered to reduce their budgets a total of 6.55% from what the Legislature approved in the 2015 Legislative Session. The 6.55% in reductions will total approximately $400 million. In addition, the bill spends $75 million in the Budget Stabilization Fund which was created for times like this (it is often referred to as the rainy-day fund). That fund will now have a zero balance. Also, up to $100 million from Bank of North Dakota profits can be used if necessary.

It is important to note that Department of Human Services will not see the 2.5% reduction and the Department of Corrections and Rehabilitation will only have its budget cut 1% vs 2.5%. These special exceptions were given to the agencies because of how detrimental further budget reductions would be to the services they provide.

These reductions follow several years of exponential growth in state government spending. The general fund budget more than tripled since 2005 primarily in response to the rapid growth in oil activity in the state. 

Following the special session, Pam Sharp, with the Office of Budget and Management gave a look at the most recent revenue forecast for the next biennium. It was prepared with the "worst case scenario" in mind; in order to prevent a situation of over-projecting revenues. The 2017-2019 forecast shows a 4.9% increase in tax revenues or $175 million more collected in comparison with the 2015-2017 biennium. The forecast  projects an increase in oil and gas tax revenues as well, while using very modest numbers. It is basing tax collections on production going down to 900,000 barrels per day and averaging $42 per barrel in 2017 but rising to $58 per barrel in 2019. Current oil production is 1 million barrels per day and the price for a barrel of oil is just below $40 a barrel.


This chart does provide an interesting perspective. Look at the collections in the first three bienniums on the chart, starting with 2005-07. Compare those with the 2015-2017 forecast. It shows we are still seeing growth in revenues over the 2009-11 biennium.

County 911 Centers Reach Major Milestone

NDACo is happy to report that the last of the state’s twenty-one 911 centers was successfully migrated to a new IP-based network as of August 3^rd.  

The new network replaces a decades-old system of analog telephone lines that limited 911 centers from receiving anything more than basic voice and location data.  911 centers will continue to serve the public as they always have but the completion of this new IP-based network has prepared them for future delivery of new types of media from the public including text messages, pictures, videos and more.  

This is a major milestone for the State of North Dakota as it joins only a handful of states nationwide to make such an profound advancement in 911 service.  This upgrade is the foundation for future services like Text to 911 being available in North Dakota. That service should be available in the state in the next few months.

Congratulations!

ND Senate Approves Budget Bill

The Senate unanimously approved a budget bill aimed at addressing the state's projected revenue shortfall. Senate members debated for two hours over proposed amendments. The amendments were targeted at restoring cuts made to the property tax relief fund and the Department of Human Services.
The bill authorizes 2.5% budget cuts from state agencies. This is in addition to the 4.05% cuts Governor Dalrymple authorized in February. The bill authorizes the use of $75 million from the Budget Stabilization Fund and $100 million from Bank of North Dakota profits.

The House Appropriations Committee also discussed possible amendments, none of which were given committee approval. The House will vote on the bill Thursday morning.

Legislators will get a briefing on the 2017-2019 revenue forecast following the final approval of the budget bill.