By JAMES MacPHERSON, Associated Press
BISMARCK, ND (AP) — Agencies in North Dakota can use their current budgets as a starting point for drafting new two-year spending plans, and while agency heads should consider inefficiencies, they don’t will not have to identify potential cuts, Gov. Doug Burgum said Thursday.
The Republican governor’s directives come with the state teeming with cash thanks to soaring oil prices and revenues far exceeding forecasts.
In remarks at a meeting of department administrators at the state Capitol, Burgum said agencies should take a conservative approach to budgeting. He said he intends to include a salary increase for state employees in his next two-year budget recommendation, although he did not provide details on how much he will propose. to lawmakers, who could pass an equal increase for themselves.
The guidelines will be used by North Dakota departments to write spending plans for the 2023-2025 budget cycle. Burgum will use the plans to draft his own spending plan for the Legislative Assembly, which lawmakers will receive during their organizational session in December.
Burgum said his guidelines would not affect proposals for one-time projects, such as technology upgrades. The former software executive said the state was “underinvested in digital infrastructure,” leading to inefficiencies in state government.
He said “there’s too much in the state that we’re still doing manually.”
State spending has increased dramatically in recent years as revenue from oil production has swelled North Dakota’s coffers. The state’s current $17 billion two-year budget is the largest on record and about $2.1 billion more than the previous one.
The increase in the current budget largely reflects the additional $2 billion the state received in federal coronavirus relief.
State general fund revenue for the current budget cycle is 13.1%, more than $200 million ahead of forecast.
The state’s general fund is spent on an assortment of programs, including education and social services, and is primarily funded by state income, sales, and energy taxes.
Oil prices are a key contributor to the wealth of North Dakota, which is the third largest oil producer behind Texas and New Mexico. North Dakota budget officials estimate that every dollar the price of a barrel of oil rises or falls has an annual impact of more than $40 million on the state treasury.
Last spring, lawmakers assumed oil prices would be $50 a barrel when they crafted the current two-year budget. North Dakota oil has been priced around $100 a barrel in recent weeks.
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