calculatorBISMARCK, N.D. (AP) – Gov. Jack Dalrymple is asking agency directors to include 10 percent spending reductions in their proposed budgets for the next two years.

The Republican governor’s directive on Wednesday reflects a downturn in tax revenues due to slumping oil prices and activity. The blueprint is the biggest proposed budget decrease for state agencies since Democratic Gov. George Sinner suggested 10 percent reductions in 1992.

North Dakota Budget Director Pam Sharp says Dalrymple’s budget plan is “appropriate and is needed” due to less-than-forecast tax collections.

Dalrymple’s directive marks the beginning of the lengthy job of writing his spending recommendations for the 2017 Legislature. Lawmakers will get Dalrymple’s blueprint in December.

From Governor Dalrymple’s Office…

BISMARCK, ND – Gov. Jack Dalrymple today issued to state government agencies his budget guidelines for the 2017-2019 biennium.  Dalrymple directed agency leaders to develop General Fund base budgets equal to 90 percent of their 2015-2017 appropriation for ongoing expenditures as passed by the Legislature.

 

Dalrymple said the North Dakota Department of Human Services (NDDHS) and the North Dakota Department of Corrections and Rehabilitation (NDDOCR) will not be strictly held to the 10 percent budget reduction because additional consideration must be given to services that impact public safety and the state’s vulnerable citizens.  The Office of Management and Budget will work separately with NDDHS and NDDOCR to identify adequate funding levels, he said.

 

“We have good reason to be optimistic about North Dakota’s future, but by no means does that free us from our responsibility to address the current revenue challenges head on by developing a sustainable budget plan,” Dalrymple told agency leaders. “We begin work on the 2017-2019 budget in a much different revenue environment than at this time two years ago. With tax revenues falling short of projections, we must find greater savings and efficiencies while continuing to provide high-quality services for the people of North Dakota.”

 

The Governor’s budget guidelines do not impact State School Aid, the funding for North Dakota’s K-12 schools. In addition, the state’s traditional Medicaid program will not be subject to reductions beyond those implemented under the current budget’s allotment process.

 

Many reductions implemented by agencies as part of the current budget’s 4.05 percent allotment will likely be continued into the next budget cycle, but agency leaders are not locked into the decisions they made to meet the allotment, Dalrymple said.

 

Although General Fund budget guidelines don’t apply to special funded agencies, Dalrymple said he expects those agency directors to also perform a thorough review of their operations and submit budget proposals that produce savings.

 

Dalrymple credited the Legislature for developing a sound 2015-2017 budget that took into account the possibility of reductions in oil and farm commodity prices. The state focused the use of its strong cash reserves on one-time capital projects that don’t have to be repeated. The state’s one-time infrastructure investments included highway bypasses that serve Williston, Watford City and Dickinson and a new airport terminal in Minot.  The state’s strong cash reserves also funded much-needed water projects, including flood control projects in Minot and Valley City, and allowed the state to catch up on college campus improvements including the STEM classroom and lab building at NDSU and the School of Medicine and Health Sciences at UND.

 

“No one could foresee the extent to which commodity prices would fall after the Legislature adopted the current budget,” Dalrymple said. “But because of the Legislature’s prudent budgetary planning, and the 4 percent allotment implemented in February, the budget will remain balanced at the end of the current biennium.”

 

In developing the 2017-2019 Executive Budget, Dalrymple said capital projects will not be funded unless absolutely critical.

 

“The slowdown in our economy, particularly in Western North Dakota, presents the opportunity to reevaluate the service levels required in many areas,” Dalrymple said. “We must continue to demonstrate that we are good stewards of the people’s money and that we will do everything necessary to operate a highly efficient and financially sound state government.”