State agencies that are funded through the state’s general fund will have to make cuts – that will equal about 4.05 percent of their budgets.
"We're $1 billion, 74 million short of the original Legislative forecast," said state Office of Management and Budget Director Pam Sharp.
Sharp says that’s due to weakness in the oil and agriculture sectors. Sharp says to make up that shortfall, agency budgets will be cut by a total of $245 million. Once that allotment is made, Gov. Jack Dalrymple will take $498 million out of the state’s rainy day fund, the Budget Stabilization Fund. The remaining money will be made up by the ending fund balance – projected to be $332 million.
"It balances out to zero," said Sharp. "Our requirement is we have to balance the budget, so we're balancing it. But we're not going to cut budgets to provide an ending balance, and we're not going to take more money from the stabilization fund."
This will leave about $75 million in the rainy day fund. K-12 education is held whole, because it has its own stabilization fund. Sharp says nearly $72 million will be taken from that fund.
Some state lawmakers suggested Dalrymple order larger allotments, keeping more money in the rainy day fund.
"We did a lot of careful analysis," Dalrymple told state agency heads. "We came to the conclusion that 4.05% was the maximum reduction we could make without causing unacceptable negative impacts on sensitive areas, such as medical services and prison security."
Sen. Majority Leader Rich Wardner (R-Dickinson) says he wasn’t surprised by the allotment amount.
"We're prepared for this," Wardner said. "Yes, it's going to hurt a little bit. But if we had spent it all, and not put any money away, it would have hurt a lot more."
State agencies will have until February 17th to tell OMB where they will make their cuts.
