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Governor Calls for Hold-Even Budget

Press Release

Location: Bismarck, ND

The state's commitment to meeting the needs of growth and providing long-term flood protection will continue into the next biennium, and Governor Dalrymple asked that state agencies look for ways to create efficiencies and eliminate efforts that no longer fit the state's priorities.

Governor Dalrymple announced his guidelines today for the 2013-15 budget cycle. Dalrymple directed agency leaders to develop a hold-even budget and to draft optional budget packages that include spending reductions of 3 percent in the event that savings are needed.

"All of these factors require that we take a conservative approach to the budget process," said Dalrymple. "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 prudent investments in our future, and ultimately, allows us the opportunity to consider more broad-based tax relief."

He continued, "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."

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 always will be required to pick up a significantly larger share of Medicaid during the new biennium -- some $91 million will need to be made up from lost federal funds. Going forward, the state expects to receive fewer and fewer federal dollars.

"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 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 opportunities, growing prosperity and also the challenges that come with strong economic growth."

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 the 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.

"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."

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