The chairman of the Senate Appropriations Committee says a “what if” scenario run by the Legislative Council shows the 2015 session was forward-thinking in spending state money, with oil prices dropping.
The Council compared the status of the general fund from July through September. It shows general fund revenue collections about 10.5 percent under forecast –and projects that – if the rest of the biennium tax collections came in at the forecasted amount, the state would end the two year period $269 million in the black. But Council also ran numbers based on an on-going drop in revenue collections at the 10.5 percent rate. That would leave the state’s balance in the red by $188 million on June 30th, 2017.
Sen. Ray Holmberg (R-Grand Forks) says the Legislature did position itself well.
"We had the Governor's budget last December," said Holmberg. "In January, we recognized the money was not going to come in. And we reduced substantially our estimates on what the budget would be."
Holmberg says for the remaining months of the 2013-2015 biennium, lawmakers reduced income by about $130 million. And for the current biennium, he says that figure was reduced by $550 million.
"We ratcheted down expectations," said Holmberg. "So at the end of the session, we were pretty close, because we had already taken the big bite."
Holmberg says there are pots of money – such as the budget stabilization fund, that has $580 million in it, as well as the foundation aid stabilization fund – that the Legislature can dip into. And he says there's also the Legacy Fund, where the Legislature may start spending the interest on that fund in 2017. Holmberg says the Governor also has allotment power – but he doesn’t think the Governor will have to use that authority.
As for 2017, Holmberg says that’s not yet in focus. However...
"The largesse that came from oil, for example. mostly was focused on infrastructure and one-time funding," said Holmberg. "If the money isn't there, you don't paint the barn. You don't build a building, or you do less in the area of infrastructure."
Holmberg says a lot has been done for infrastructure in the past four years.
