BISMARCK, N.D. (AP) — Gov. Jack Dalrymple likely will ask state agencies to identify potential reductions when drafting spending plans for the next two-year spending cycle due to depressed oil prices and a downturn in drilling activity, the state’s top budget writer said Monday.
“I expect we will be asking for a reduced budget,” said Pam Sharp, North Dakota’s budget director.
Dalrymple, who is not seeking re-election, is slated to address agency directors on Wednesday at the state Capitol. The Republican governor’s guidelines will be used by North Dakota departments to write spending plans for the 2017-19 budget cycle. The governor will use the blueprints to draft his own spending plan for the Legislature, which lawmakers will get during the Legislature’s organizational session in December. The spending blueprint is due Dec. 7, a week before Dalrymple’s term ends.
Jeff Zent, a spokesman for Dalrymple, said the governor was still crafting his budget guidelines on Monday. He stopped short of saying what Dalrymple’s guidelines would be.
“The governor will be announcing guidelines in the midst of the downturn in revenues,” Zent said.
Dalrymple mostly has governed during a time of unprecedented growth in North Dakota. But in February, he ordered deep cuts to government agencies and a massive raid on the oil-rich state’s savings to make up for a more than $1 billion budget shortfall in the current budget due to a drop in oil drilling and depressed crude prices.
The state’s current two-year, $6 billion general fund budget has nearly doubled since 2009. That budget, including federal aid, is a record $14.2 billion. The general fund portion of the budget is spent on an assortment of programs, including education and human services. It is funded largely by state taxes on income, sales and energy.
Prior to North Dakota’s oil boom, it was common for the governor, in providing budget directions for agencies, to order them to trim current spending when they prepare new two-year budgets.
But in previous years, the budget guidelines rarely put the brakes on state spending growth. Dalrymple outlined a no-growth budget to state agency administrators in 2014 and 2012. The $4.7 billion general fund budget in 2012 eventually rose more than 40 percent for the 2013-15 budget period. The increase included $2.4 in state aid to help western North Dakota communities deal with exploding energy development in the region.
If Dalrymple does order a reduction for the upcoming two-year budget cycle, it would be the first since 2002, when Hoeven ordered a 5 percent cut. Hoeven’s Republican predecessor, Ed Schafer, ordered reductions in three of the four budgets for which he was responsible, ranging from 3 percent to 5 percent. Democratic Gov. George Sinner suggested 10 percent reductions in 1992, his final year in office.
Dalrymple has been governor since December 2010, when John Hoeven resigned to go to the U.S. Senate. Darymple has been re-elected twice.
Although Dalrymple will not be in office when the 2017 session begins, his budget work is likely to carry some influence, Republican and Democratic lawmakers say. Two Republicans, Attorney General Wayne Stenehjem and Fargo businessman Doug Burgum, are seeking the seat. North Dakota Democrats have endorsed state Rep. Marvin Nelson of Rolla as their choice for governor.
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