BISMARCK -- North Dakota should take a lesson from Minnesota's $4.6 billion budget problem and make hard decisions now on state spending and budget cuts, Republican legislators said Friday.
"If we put off the difficult decisions until next session, we would face dramatic cuts, as much as 5.3 percent in total state spending," said Sen. Ray Holmberg, R-Grand Forks, chairman of the Senate Appropriations Committee. "I guess it's like we bite the bullet now, a .22-caliber, or wait two years and bite a 30-ought-six later."
He said this year's tight budget situation gives legislators a chance to be innovative.
North Dakota legislators have been approving two-year spending plans that outpace expected revenue every session since 1989. They avoided going into the red because during the 1990s, revenues always ended up much better than lawmakers had expected and the extra gave them a jump start paying for the next budget.
"In the past, we've always counted on strong revenue growth to close these gaps," said House Majority Leader Rick Berg, R-Fargo.
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They have also relied on transfers from the Bank of North Dakota's profits.
But now, instead of a starting out the 2003-05 budget process with a surplus, the state starts at zero. That's because $50 million failed to come through in personal income taxes last year.
Holmberg said the state will have to choose between what it wants, what it needs and what it can afford.
House Appropriations Chairman Rep. Ken Svedjan said no programs or line items are eyed for cuts at this stage; it's too early.
"We haven't targeted anything specifically," he said. "Everything is on the table. No initiatives are automatically dead on arrival. It's all subject to review."
Holmberg said that if the appropriations committees were to pass a budget as just a slimmed-down version of the last budget, "what we're doing is locking this Legislature into the last Legislature's priorities," something that would not be innovative.
Berg has asked all state agencies to give the Legislature a statement of their main purpose and how the agency measures whether it is meeting its purpose. It's part of this session's search for innovations.
Svedjan said he is concerned that the extra money Hoeven predicts from a proposed tobacco tax and other revenue sources won't materialize. Some states that raised their tobacco taxes have not seen higher revenues, he said.
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Gov. John Hoeven said all the revenue projections in his budget are conservative.
"They (legislators) are going to see we worked this very hard and struck a good balance," he said.
Readers can reach Forum reporter Janell Cole at (701) 224-0830
