Just one day before North Dakota’s Legislature convened, Lt. Gov. Drew Wrigley offered a candid explanation of what the governor’s priorities are when it comes to the state’s budget during the inaugural Eggs & Issues forum.
More than 100 people listened as Wrigley described the “structural balance and structural surplus” components of the budget, including $408 million in tax relief, a reconfiguration of the gross oil production tax, funding for western North Dakota communities and airports as well as water supply project funds for the east.
“The people of this state have come to realize more than ever before that we have a linked economy,” Wrigley said. “There is one North Dakota, and we’re absolutely in this together.”
One of the major points Wrigley asserted throughout his discussion is that the state’s budget will fluctuate by $100 million for every dollar fluctuation in the average oil prices. The day of the presentation, oil prices hovered at $52 a barrel.
Here’s a breakdown of what Wrigley highlighted:
- Structural surplus will result from a $5.37 billion revenue stream with only $5 billion in expenditures. The state also has $3.697 billion in reserves currently, with $3.47 billion in reserves by the end of the 2015-2017 session.
- Tax relief is a “recognition of right-sized government,” Wrigley said, citing $100 million in personal income tax relief with $25 million in corporate income tax relief.
- After having budgeted for $1 billion and $2.5 billion for infrastructure improvement projects the last two budget cycles, the governor has increased that amount to $3 billion for the 2015-2017 session.
- Wrigley predicted that the $873 million budgeted as “jump start” funding for cities in western North Dakota will spark “some lively conversation.”
- Another area of the budget Wrigley predicted debate is the reconfiguring of gross oil production tax for counties. The governor recommends that after counties receive $5 million from 100 percent of oil production tax revenues, they should receive for at least the 2015-17 biennium, 60 percent of the revenue from the oil production tax. That change will provide $1.7 billion for the oil-producing counties.
- The budget also continues the Energy Impact Grant program, which budgets $119 million in new grant funding to address the impacts of rapid growth in the oil producing region.
- Nearly $70 million is budgeted for permanent flood protection, in alignment with the state’s $450 million total pledge.
- Another water project that has been budgeted for is a $150 million water supply project that will move water from west to east.
- The budget also includes funds for a law enforcement training center in Bismarck as well as grants for local police forces.
- In the realm of education, the budget calls for a tuition freeze for two-year schools, $145 million for capital improvement plans as well as a private/public matching funding program.
Wrigley said reducing sales taxes was determined to have less impact on individual taxpayers, and he explained that caution is warranted when deciding to eliminate an entire category of taxes. “People need to think about whether it’s appropriate to pay for everything on the back of a high-priced commodity,” Wrigley said.
You can access the governor’s proposed budget online.
The next Eggs & Issues forum will be Feb. 3.