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Dalrymple Issues 2013-2015 Budget Guidelines

Press Release

Location: Bismarck, ND

Gov. Jack Dalrymple today issued to state government agencies his budget guidelines for the 2013-2015 biennium, calling on agency leaders to use a balanced approach that will hold the line on spending while meeting the state's pressing needs. The Governor announced his budget guidelines during a meeting of agency heads and fiscal officers at the State Capitol Building. Highlights of the address follow:

"We are serving the citizens of North Dakota during a remarkable period in our state's history," Dalrymple said. "Since 2000, we have created more than 65,000 new jobs, and we currently have more than 20,000 job openings. We have one of the strongest economies in the nation; we lead the country in personal income growth and our population has grown by 50,000 people. It's a very dynamic time, filled with new opportunities, growing prosperity and also the challenges that come with strong economic growth.

"It is during times of strong economic growth that we must be especially mindful not to create an overly expansive government that burdens future generations," Dalrymple said. "I am committed to holding the line on on-going spending while recognizing that we must also meet the needs that come with natural disasters and rapid growth."

Dalrymple directed agency leaders to develop a hold-even budget for the 2013-2015 biennium. He also called on them to draft optional budget packages that include potential spending reductions of 3 percent in the event that savings are needed.

As the state's economy continues to grow, so does the need for state services. Dalrymple told agency heads to consider all other options for providing quality services before requesting a new, full-time equivalent employee (FTE).

"We recognize there are some agencies facing tremendous workload increases due to the growth in our economy," Dalrymple said. "At the same time, remember that we must develop a sustainable budget plan."

Dalrymple said any agency that is experiencing significant growth in the demand for services which requires additional staffing, may include proposed staffing changes as an optional budget request.

"The dynamic growth throughout our state requires that we become more creative and more efficient service providers. Consider all opportunities to leverage or reprioritize existing resources, including staffing. Programs and staffing should always be evaluated in terms of their results. Keep our best programs, consolidate when it creates efficiencies and eliminate efforts that no longer fit our priorities," Dalrymple said.

Dalrymple said the state's economic growth hasn't come without challenges. During the current biennium, the state will provide unprecedented funding to help meet the impacts of rapid growth in western North Dakota and to provide flood recovery assistance. The state's commitment to meet the needs of rapid growth and to provide long-term flood protection will continue into the new biennium, he said.

The Governor said there is a misconception that any budget challenges can be remedied with oil revenues. The state's oil tax revenues are strong, but by statute, the General Fund budget includes no more than $300 million in oil tax revenues. That represents less than 10 percent of General Fund expenditures.

The Legacy Fund, created by a vote of the people, receives 30 percent of oil tax revenues. The remaining revenue is distributed to counties and other funds, including the Property Tax Relief Fund, the State Disaster Relief Fund and the Strategic Investment and Improvements Fund.

The state's budget challenges include having to sustain spending increases adopted during the last legislative session. As the state's economy grows and personal incomes continue to rise, the state also will be required to pick up a significantly larger share of Medicaid during the new biennium. To sustain North Dakota's current Medicaid program, the state will have to make up $91 million in lost federal funds in the new biennium. Going forward, the state expects to receive fewer and fewer federal dollars.

"All of these factors require that we take a conservative approach to the budget process. The budget guidelines presented today will help us make important decisions that will affect our state for years to come. We owe it to the people of North Dakota to develop a balanced budget that provides quality services; that allows us to continue meeting unforeseen challenges: provides for prudent investments in our future and, ultimately, allows us the opportunity to consider more broad-based tax relief," Dalrymple said.

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