state budget

In his 2020 executive budget request, Gov. Doug Burgum is proposing a $1.25 billion bonding program for infrastructure projects.

Burgum presented his executive budget recommendation to state Legislators Thuursday.

Burgum told Legislators the earnings of the Legacy Fund would be used to create a Legacy Bond Repayment Fund. That money would be used for bond debt payments. It also creates a revolving loan fund, where local governments can go to borrow money for local infrastructure projects.

The October state revenue report was a mixed bag.

"We fell short of the original Legislative forecast by about 25 percent," said state Office of Management and Budget director Joe Morrissette.

However, Morrissette said it falls in line with the newer state revenue forecast, issued in September.

"And that forecast shows we'll be able to make it through this biennium, despite the shortfall, without having to call for an across-the-board state budeg reduction," Morrissette said.

The state of North Dakota is still ahead of what it was expecting to collect in taxes – even considering the effects of the pandemic.

"The amount collected through September is $93 million, or 2.8% higher, than the original revenue forecast," State Budget Director Joe Morrissette told the Legislature's Budget Section. "That is certainly positive news, as we are continuing to track slightly ahead of forecast, even through the pandemic."

Morrissette told the Legislature’s Budget Section that would give the state treasury an ending fund balance of $137.2 million.

North Dakota’s budget director said the state will end the current two year biennium in the black.

Joe Morrissette told the Legislature’s Budget Section the state had been running ahead of the 2019-2021 budget forecast, in terms of tax collections. Morrissette said the COVID-19 pandemic did cut into those collections, starting in March. But he told the Committee the earlier, stronger collections gives a budget cushion for the next two year period.

"We have an estimated ending fund balance at the end of this biennium of $160 million," Morrissette said.

North Dakota’s Budget Director said the state is still projected to end the current two year period with money in the bank.

Joe Morrissette told the Legislature’s interim Government Finance Committee, earlier projections had the bank balance at around $200 million on June 30, 2021 – the end of the biennium. But Morrissette said the numbers reported in May were not looking good.

"For the month of May, we saw sales tax that was short of the original Legislative forecast by 35%, or $27 million," Morrissette said. "That's the worst month that we've seen."

A recent study by a financial consulting group shows North Dakota ranking third in the nation for its “rainy day” government funds.

The study was done by SmartAsset.

Many of the funds date back to the “bucket bill,” passed in the 2011 Legislature. Dubbed "The Bucket Bill," it put oil tax collections into various “buckets,” setting up how oil revenues would flow.

North Dakota’s Budget Director said the Burgum Administration is still planning to give state agencies budget guidelines by the end of April.

The agencies use those guidelines as they prepare their budgets for the 2021-2023 biennium. Those budget requests are sent to the Governor’s office.

State OMB director Joe Morrissette told the Legislature’s Budget Section state agencies have a statutory deadline for submitting their budget requests. That’s the middle of July.

North Dakota’s Budget Director says the planned start of the budget forecasting process for the next biennium has been delayed – because of uncertainties surrounding the coronavirus pandemic.

That process was to begin this week, with a meeting of a revenue advisory committee. That committee was to hear from Moody's Analytics, the state's budget consultant.

November’s revenue collections were slightly behind forecast.

Driving that were sales tax and individual income tax.

But North Dakota’s budget director said that could be more of a timing issue than anything. Joe Morrissette said that’s because the last days of the month of November fell on a weekend.

"As the businesses make those payments and deposits, they typically make the payments on the last calendar day of the month," Morrissette said. "And when that day falls on a weekend, those collections are, for the most part, accounted for in the following month."

The director of North Dakota’s Office of Management and Budget said he has a concern about the effect of the downturn in the agriculture economy on state revenues.

Joe Morrissette said agriculture accounts for about 8 to 12 percent of the income tax collections, plus affects sales taxes. He said 2019 has been a tough year for farmers.

"This is a unique situation, with this much unharvested crop," Morrissette said in an interview.

Morrissette said in some situations, farm income could be stabilized through federal payments.