State revenue recovering
North Dakota’s revenue picture continues to improve.
In August, revenue collections exceeded the Legislative forecast by 10 percent. For the biennium to date, collections are nearly 4 percent ahead of forecast.
"It indicates again that we've seen the bottom," said state Office of Management and Budget director Joe Morrissette.
Morrissette said increased oil activity in western North Dakota means increases in oil taxes and sales tax collections. Sales taxes for the month of August were nearly 26 percent ahead of forecast.
The Legislature had created a series of “buckets,” or special funds, for oil revenue collections.
"Well, in short, they're filled," Morrissette said.
One of the “buckets” is the Strategic Improvements Investment Fund. Morrissette said that fund received $15 million in oil tax revenues in August.
"From here on out, all the remaining state share of oil tax collections will flow into this fund," Morissette said.
And Morrissette said that fund is on pace to exceed the Legislative forecast by $500 million.
The budget stabilization fund also looks better than predicted. Morrissette said everyone thought the fund would be completely depleted, as lawmakers used it to help balance the state budget.
"Revenues were a little stronger than anticipated in May and June," Morrissette said. "We were able to transfer some money to the fund at the end of June."
Morrissette said $75 million from oil tax collections has been allocated to the stabilization fund.
"Based on how we're exceeding the general fund forecast, we would estimate another $120 million to $130 million would flow in there from the end of the biennium balance in the general fund," Morrissette said. "That should push it up to about $250 million by the end of the biennium."
One potentially big unknown is the effect collection of state sales tax from Internet retailers will have on revenues. Morrissette said there isn't any way to forecast that for the remainder of the biennium, but budget writers will have some better figures to add to the 2019-2021 projections.