The North Dakota Legislature was treated to some very good news regarding the revenues that will be available for the next two-year state budget. Projected revenues are better — much better — than the grim forecast that was waiting for legislators when the session started.
This bodes well for the state’s future. There’s a strong consensus between Gov. Doug Burgum and legislative leaders for the need to invest boldly in strategic areas including public works to strengthen the state’s economy.
Burgum proposed a $1.25 billion bonding plan that included a $700 million revolving loan fund for cities and counties for water, road and infrastructure projects. Sen. Rich Wardner, R-Dickinson, the Senate majority leader, and Rep. Chet Pollert, R-Carrington, the House majority leader, proposed bonding proposals totaling about $1 billion.
But those bold proposals were hit with a cleaver in the House Appropriations Committee, which carved the bonding package down to $680 million.
Fortunately, even that bare bones bonding package includes $435.5 million to complete the state’s generous share of the $2.75 billion flood diversion project to protect the Fargo-Moorhead metro area.
But it skimps on infrastructure investments, allotting $70 million for highway repairs and only $50 million for cities and counties. And it earmarks nothing for career academies, which are both very popular and vital for addressing the state’s chronic workforce shortage.
The good news is that Wardner is pushing to add $180 million in priorities to the bonding bill. At the top of his list is $60 million to build and equip technical education centers such as the career academy planned in Fargo, with $45 million set aside for construction.
Wardner’s plan also includes $30 million for township roads and $10 million for state park maintenance, which is important for the state’s tourism industry.
Efforts to restore funding to the bonding package are backed by a significantly better revenue outlook than lawmakers confronted from the November forecast.
How much better? Oil revenues now are expected to bring in almost $4 billion during the 2021-23 budget — that’s $1.1 billion more than forecast in November. So far this biennium, revenues are running 1.4% and are expected to end the 2019-21 budget $60 million above forecast.
Oil prices, a critical component in assembling the budget, are 50% higher than when Burgum’s team put together the executive budget recommendations last fall.
North Dakota’s economy is simply in a much better position than it was a few months ago, and economists expect the economy will soar when we emerge from the COVID-19 pandemic later this year.
And, we repeat, interest rates are near historic lows. Borrowing money is on sale. Legislators shouldn’t squander this opportunity to make investments in critical infrastructure and other priorities. They can do it without raising taxes.
Specifically, legislators will have failed if they end the session without coming up with funding to support career academies to bolster the state’s workforce. North Dakota leaders have been prudent with the state’s money. Now the time has come to borrow a modest amount to address key priorities.