Outgoing Gov. Dalrymple to request reduced budgets

BISMARCK – For the first time since 2002, North Dakota’s governor will ask state agencies to propose smaller budgets for the next biennium as uncertainty looms over how soon the oil and farm sectors that drive the state’s economy and tax revenues will rebound.
Gov. Jack Dalrymple, who is not seeking a second four-year term in office in November, will deliver the budget guidelines at 11 a.m. Wednesday in the Capitol’s Brynhild Haugland Room.
Dalrymple spokesman Jeff Zent wouldn’t get into details but said the guidelines “will lead to a sound budget proposal for the Legislative Assembly,” which meets in regular session every two years, next in January 2017.
“To do that, the governor will certainly address the state’s recent shortfall in tax revenues,” Zent said.
Office of Management and Budget Director Pam Sharp said officials had a percentage to cut in mind but were still finalizing the guidelines.
House Majority Leader Al Carlson, R-Fargo, said he anticipates Dalrymple will ask agencies to submit budgets at 95 percent of their base funding level for the current biennium. That would be deeper than the 4.05 percent across-the-board cuts ordered by Dalrymple in February, which were triggered by a revised revenue forecast that projected a $1.07 billion shortfall for 2015-17.
“There’s been enough growth in recent years that I think there’s enough room to deal with that without a whole lot of pain,” Carlson said.
Senate Minority Leader Mac Schneider, D-Grand Forks, said he won’t be surprised if Dalrymple requests 90 percent or 95 percent budgets.
“I hope it’s a chance to re-evaluate the across-the-board cuts that have so thoughtlessly gone into effect,” he said, referring to the $245 million cut in February’s allotment.
Schneider also said it would be a sign of leadership for state lawmakers, statewide elected officials and agency heads to forgo raises next biennium to “show solidarity with the people of North Dakota who are bearing the brunt of these cuts.”
John Hoeven was the last governor to request reduced budgets, asking agencies for 95 percent budget proposals in 2002 after the 9/11 terror attacks and dot-com bust. Former Gov. Ed Schafer also requested 95 percent budgets for 1995-97 and 97 percent budgets for 1997-99.
Dalrymple, who rose from lieutenant governor to governor when Hoeven was elected to the U.S. Senate in 2010, asked agencies to submit hold-even budgets in both 2012 and 2014, but it did little to limit state spending or his executive budget proposals.
His general fund budget proposal for 2013-15 was $550 million more than the $4.2 billion appropriated for 2011-13. Lawmakers went even further, approving a $6.86 billion budget with millions to address needs in the state’s booming Oil Patch.
The executive budget proposal for the current two-year cycle was more than $7.2 billion – though that recommendation was made in December 2014, before the severity of sliding oil prices became clear.
Lawmakers ultimately passed a $6.03 billion budget for 2015-17, which was down from the previous cycle but still more than double the 2007-09 budget. The total budget for this cycle, including federal funds, jumped by $500 million to a record $14.2 billion.
The budget guidelines will apply to 58 agencies that receive general fund dollars. Agencies that operate with special funds, including the Game and Fish Department and state-owned Bank of North Dakota, also will be asked to look for efficiencies, Sharp said.
Agencies must submit their budget proposals by July 15, though extensions are allowed. Dalrymple will deliver his budget proposal during the Legislature’s organization session on Dec. 7, about a week before his term ends.
“The Legislature’s going to need to be involved more this time than it’s ever been involved in the budget appropriation, and we have every intention of doing that, especially with a changing of the guard in the governor’s office,” Carlson said.