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North Dakota, legislative report
Yesterday marked the end of the first half of the legislative session. Photo: Richie Diesterheft via Flickr.

Legislature approves bill to address $310 million shortfall

BISMARCK, N.D. (AP) — North Dakota legislators agreed Thursday to cut spending for most state agencies to help cover a $310 million budget shortfall, signaling some of the money for social programs could be restored if revenues eventually recover from slumping crop and oil prices.

Although the Legislature isn’t scheduled to reconvene until January, Republican leaders called a three-day session to satisfy a constitutional requirement that the state maintain a balanced budget.

Despite attempts by the Democratic minority to soften some of the cuts, the bill crafted by Republican Gov. Jack Dalrymple and GOP legislative leaders sailed through with no changes.

“I’m saying no to this staged event,” said Fargo Democratic Rep. Pamela Anderson said.

The state House voted 82-8 to pass the bill Thursday morning, a day after the Senate endorsed it 46-0. Dalrymple signed it before noon on Thursday.

The legislation orders a 2.5 percent, $152 million most government agencies, drains the remaining $75 million of a rainy day fund, and makes available up to $100 million in profits from North Dakota’s state-owned bank to balance the state’s books

“This bill accomplishes what needed to be done by taking us to the end of the biennium with a balanced budget,” Dalrymple said in a statement.

Crop and oil prices, key contributors to the state’s wealth, have plummeted since the Legislature adjourned in May 2015 and planned its budget that began July 1, 2015, on overly optimistic revenue projections.

The entire two-year budget for North Dakota state government, including federal aid, was a record $14.2 billion when lawmakers approved it last year. The general fund share of the budget has now been cut from $6 billion to $4.7 billion, with the legislation passed Thursday combined with a $1.1 billion cut Dalrymple previously ordered in February.

Gail Mooney, D-Cummings, and other Democrats predicted the cuts in the legislation would hurt everything from nursing homes to drug treatment programs.

“We’re balancing the books on the backs of our people,” Mooney said. “It’s not right.”

The GOP noted that cuts to the Department of Human Services, which administers and funds state social programs, will be restored by shifting about $33 million from the state’s general fund, under the legislation. The cut to the state Corrections Department is only 1 percent.

“We’re not throwing anybody under the bus,” House Republican majority leader Al Carlson of Fargo said. “Some people thought we didn’t cut enough and some people thought we cut too much.”

After the special session formally ended Thursday, state budget director Pam Sharp presented legislators were given a fresh set of numbers that predict a modest 4.5 percent increase in revenue for the next two-year budget cycle. North Dakota’s daily oil production is pegged slightly more than 1 million barrels a day at present. North Dakota sweet crude was fetching about $40 a barrel on Thursday.

The new revenue done by the economic consultancy Moody’s Analytics predicts North Dakota oil will fetch between $42 and $52 a barrel during the 2017-2019 budget cycle, though production is forecast to drop by about 100,000 barrels daily.

The new estimates, which again will be updated in November, signal how much money legislators may have to spend in the future, though some lawmakers remain skittish about declining prices for oil and farm commodities.

“Any revenue estimate is somebody’s best guess,” Carlson said.

 

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