STATEMENT OF GOV. JOHN HOEVEN ON THE DEATH OF FORMER PRESIDENT GERALD R. FORD

Governor Directs Flags To Be Flown at Half Staff for 30 Days

BISMARCK, N.D. – In honor of President Gerald R. Ford, the 38th president of the United States of American, who died yesterday, and in accordance with a proclamation by President George W. Bush, Gov. John Hoeven has directed all state and federal flags in North Dakota to be flown at half-staff, beginning Wednesday, December 27, 2006.

The Governor also issued the following statement:

“President Ford led our nation when he was called upon to serve. He provided thoughtful guidance and integrity, and will long be remembered as a man of quiet dignity, honesty and sound judgment.

“Our thoughts and prayers go out to First Lady Betty and the Ford family. North Dakota and the entire nation join them in mourning the loss of a great American.”

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In Case You Missed It …. Fargo Forum Editorial: Hoeven’s Budget Plan a Good Start

Forum editorial: Hoeven’s budget plan a good start

The Forum - 12/10/2006

Building a state budget when the revenue coffers are overflowing has to be more fun than scraping up funding in lean times. But it also can be more complicated and more risky.

North Dakota Gov. John Hoeven and his budget team have cobbled together what can be fairly called a “good times” budget because the state is looking at the largest surplus in its history – approaching $500 million in all reserve funds. Hoeven’s budget, which he presented to lawmakers last week, would leave nearly $413 million in cash and reserves when all expenditures he envisions are met during the next biennium. It’s an unprecedented cushion.

That set-aside is important because it goes to the heart of the latest budget buzzword afflicting some lawmakers: sustainability. Be careful about spending all that money on new programs, they warn, because when the economy slows, the new expenditures cannot be sustained.

Fair enough. But the warning assumes the governor’s budget tilts toward expenditures that could become albatrosses if the good times turn bad. However, an honest assessment of Hoeven’s proposals confirms his team has been careful to avoid committing the state to unsustainable programs.

A few highlights:

- When combined with a generous $117 million property tax relief plan (which would help keep local school taxes in check) the governor’s$80.5 million for equity and adequacy in schools totals nearly $200 million – a nice increase in the state’s share for public schools.

- Universities would receive$68 million more in the higher education operating budget. Another $20 million is directed to centers of excellence, which are on university campuses.

- Hoeven proposed a 4 percent per year increase in pay for state employees over the biennium.

- Human Services would get$71 million to cover the costs of a reduction in federal Medicaid funding, civil commitments for sex offenders, an inflationary increase for long-term and home- and community-based care, mental health and the needs of developmentally disabled North Dakotans.

There’s more, of course, and all of it will be sliced and diced, parsed and peeled by lawmakers. But thus far, reactions from most legislative leaders on both sides of the political aisle have been cautiously positive. Of course, it’s very early in the process; political posturing and substantive disagreements are guaranteed.

But overall, the governor has advanced an appropriately conservative budget that could have been a runaway expense train because there is so much money in the state’s pot. He didn’t let that happen. Instead, lawmakers have a responsible, pragmatic and responsive budget blueprint from which to work. It’s an excellent start.

Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board.

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The Headline Says It All .... European Socialists eager to work with U.S. Democrats

OPORTO, Portugal (Reuters) - European Socialists promised on Thursday to work to rebuild Europe's strategic alliance with the United States now that the Democrats control Congress after last month's elections.

Socialist leaders attending a meeting of the European Socialist Party pledged that with the Democrats on the rise, strong ties could be renewed with the United States after years of cool relations with Republican President George W. Bush.

Howard Dean, chairman of the national committee of the U.S. Democratic Party, is attending the two-day conference together with the leaders of leftist governments of several countries and party leaders from across Europe.

"We are not anti-American, we want the real America, your America," former Danish Prime Minister Poul Nyrup Rasmussen, president of the European Socialist Party, said in remarks directed at Dean.

To read the full articel click here

Hoeven Lays Out Positive Budget for North Dakota's Future

Funding Priorities, Building Reserves, Providing Property Tax Relief for Citizens

BISMARCK, N.D. Gov. John Hoeven yesterday released his 2007-2009 Executive Budget, a balanced plan that achieves three important objectives for the State of North Dakota:
First, the budget funds important priorities and invests in the future of our people and our state, especially education. It is essential that we make the kinds of investments that continue to produce quality jobs, enable us to take care of people, and continue to improve our quality of life.
Second, the budget is sustainable. Ongoing revenues cover ongoing expenditures, and we increase our financial reserves for the future to more than $400 million.

And third, the budget contains no tax increases, no fee increases, and no borrowing or bonding. In fact, our budget provides $116.7 million in real tax relief for the citizens of North Dakota.
"Working with the Legislature and others we are pursuing our strategic plan for aggressive economic development," Hoeven said. "As a result, we're growing and diversifying our economy, which enables us to fund our priorities; invest in the future; provide tax relief for our citizens; and build stronger reserves than ever before. Our budget is sustainable and prudent, but it is also dynamic and forward-looking."

GOOD FISCAL MANAGEMENT

Revenues Exceed Expenditures

For the 2007-2009 biennium, ongoing revenues and transfers will total about $2.29 billion. At the same time, our ongoing expenditures will total about $2.28 billion, meaning that even with conservative projections, ongoing revenues exceed our ongoing expenditures.

In the current biennium, the state's growing revenues are reflected in a $312 million ending fund balance. In a nutshell, this is the General Fund surplus, or the amount of cash we have above our current level of reserves. This General Fund surplus, when combined with $228 million in current reserve funds, provides a total of $540 million going forward in surplus and reserves.

The Executive Budget takes a portion of these resources $188 million and invests them in one-time capital needs, like economic development, technology systems, equipment, capital projects, extraordinary repairs, and deferred maintenance. These are the kinds of investments that further stimulate economic activity, build infrastructure, help lower costs for the future, make our state more competitive, and improve our standard of living.

Reserves Are Strong

The state's total reserve position created by the Executive Budget is significantly strengthened. The Budget Stabilization Fund is doubled from $100 million to $200 million, and the Oil Tax Trust Fund increased by $50 million, to $178 million. Together, the two reserve funds total more than $378 million. Add to this a cash ending balance of $34 million, and the Executive Budget sets aside a total of $413 million in cash and reserves.

Budget Stabilization Fund $200.0 million
Oil Tax Trust Fund $178.6 million
Cash Ending Fund Balance $ 34.1 million
Total Reserves and Cash $412.7 million

FUNDING OUR PRIORITIES INVESTING IN THE FUTURE

A Strong Budget for Education the Foundation of the Future

K-12 Education Funding: Devotes $80.5 million to improving equity and adequacy in K-12 education funding, including $76 million General Fund and $4.5 million from the Common Schools Trust Fund.

This $80.5 million, combined with the $116.7 million we've committed for property tax relief, provides a total of almost $200 million to both improve K-12 education funding and reduce the burden of property taxes.

· Higher Education Funding: Provides $68 million more for the University System's operating budget: · $52 million in on-going funding, including additional tuition assistance and the full parity and equity requests for the campuses.

1 $16 million in one-time funding for deferred maintenance, ConnectND, and other needs.
Provides $14.5 million for the capital construction and renovation budget.

Creating Jobs and Building a 21st Century Workforce

Centers of Excellence: Provides $20 million for the Centers of Excellence program, which is creating higher paying jobs and career opportunities for our citizens.

Career Specialists and Internships: Funds Career Specialists in each of the state' s nine Joint Powers Agreement alliances to link high school students with the new careers we're creating in North Dakota. Provides funding for Operation Intern, which helps our college graduates get a foothold in the job market, right here in North Dakota.

North Dakota Trade Office: Increases the NDTO budget to $1.4 million, to be leveraged with private sector funding. North Dakota exports have nearly doubled since 2000, from $625 million to $1.2 billion, and the additional funding will help to continue the office's good work.
Agriculture and Energy: Agriculture is no longer just about food we are now seeing dynamic relationships emerge between agriculture and energy.

· Biofuels PACE: A $5 million program that will provide $500,000 of interest buy-down for each new biofuels facility in North Dakota. Combined with the regular PACE and local match, the program makes up to $900,000 available to finance each new ethanol or biodiesel project. This is enough leverage to develop 10 major new biofuels projects.

1 Agriculture Research Extension Centers: Provides $9 million and other funding for a new ag research greenhouse and extension centers not only to promote new advances in food production, but also to help drive the growing biofuels industry in North Dakota.

QUALITY OF LIFE

Keeping North Dakota Safe

Last legislative session, we worked to strengthen our violent and sexual offender laws. In the upcoming session, we propose taking another step toward making our state even safer with mandatory minimums and lifetime supervision for first-time offenders.

Violent and Sexual Offenders: To support these initiatives, the Executive Budget proposes $42 million in funding for a major expansion of the state correctional center in Bismarck and more than $7 million in the Human Services budget to address violent and sexual offenders, including $2.8 million for sexual offender community treatment and $4.4 million for additions at the state hospital to manage and treat the most hardened, civilly committed sexual offenders. Also provides funding for additional law enforcement officers and a new crime lab for the Attorney General.

Taking Care of People

Caring for Our Seniors and Most Vulnerable: Dedicates $71 million in the Human Services Department budget to cover a reduction in federal Medicaid funding; address civilly committed violent and sexual offenders; and provide an inflationary increase for long-term care, home and community based care, developmentally disabled providers, mental health, and other services necessary to take care of people.

State Employees: Provides a salary increase of 4 percent the first year, and 4 percent the second year of the biennium; continues full payment of health care premiums; provides $10 million $5 million in General Funds, and $5 million in federal and special funds for an equity pool to recruit and retain qualified state workers to serve the people of North Dakota.

Supporting Our Men and Women in Uniform

Military Bonuses and Benefits: Continues and expands our $5 million Veterans Bonus program to include non-North Dakota residents in our National Guard. The plan provides North Dakota veterans with $100 for each month of overseas service and $50 for each month of domestic service. In addition, the program provides $2,500 for the heirs of soldiers who make the ultimate sacrifice in service to our country, and soldiers who receive the Purple Heart.

Tuition Assistance Program: Adds funding to sustain our goal of 100 percent tuition assistance under the Tuition Assistance Program. In addition, it expands the eligibility guidelines of the program to include accredited trade schools.

Counselor Support: Funds licensed counselors to help military members and their families confront the emotional challenges they face with deployment.

RETURNING TAX DOLLARS TO THE PEOPLE OF NORTH DAKOTA

The Executive Budget proposes dedicating a portion $116.7 million of the $167 million in Oil Tax Trust Fund revenues projected in the next biennium to provide tax relief for the citizens of North Dakota. Even after providing this property tax relief, the Oil Tax Trust Fund will increase by more than $50 million to $178 million in the Executive Budget.

"We've put forward a simple, fair plan that provides tax relief to homeowners, businesses, farmers, and ranchers, and we are committed to working with the Legislature on this and other proposals, to develop the best property tax relief plan for our citizens," Hoeven said.

BUILDING A BUDGET FOR THE FUTURE

"We must invest wisely to grow our state and save prudently to ensure sustainability," Hoeven said. "Whether it's improving education, creating more jobs, strengthening our agriculture base, building our energy resources, taking care of people, keeping North Dakota safe, providing tax relief, or supporting our military, we are committed to building a brighter future for our state."
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Once Unloved, Medicare's Prescription-Drug Program Defies Critics, But Issues Remain

Once Unloved, Medicare's Prescription-Drug Program Defies Critics, But Issues Remain

By David Wessel
The Wall Street Journal
December 7, 2006

The Medicare prescription-drug benefit, the biggest expansion of a social program since the Great Society of the 1960s, was panned by critics when it was in previews. Now, after a year's run, the elderly audience seems to be applauding, public and private actors are clicking better in the very complex production, and costs are below initial estimates.

Although the program's launch was marred by bureaucratic glitches, befuddled senior citizens, frustrated pharmacists and physicians, and experts asserting it should have been set up differently, critics' worst fears haven't materialized. That fact is often overshadowed by continuing partisan bickering over the program's design and by persistent public suspicion of drug makers, insurers and pharmaceutical-benefit managers.

Critics said the program, which subsidizes private drug-insurance plans that compete to sell coverage to Medicare's million beneficiaries one by one, would flop because too few insurers would offer policies. Most beneficiaries ended up with more than 40 options. The current complaint is that there are too many choices.

Critics said the program's initial unpopularity proved it was a mistake. It certainly didn't deliver the political boost to Republicans that they had hoped for. But it hasn't been the public-relations disaster that some Democrats suggested.

Now that many seniors are saving money on drugs, instead of struggling to pick a plan, polls have turned favorable. A survey of 3,400 beneficiaries by J.D. Power & Associates found 45% "delighted" with the program, rating their Medicare drug plans 10 on a 10-point scale; another 35% rated them an 8 or 9.

A Kaiser Family Foundation survey found that 80% of seniors enrolled pronounced themselves "satisfied" with their plan, though about one in five reported having "a major problem," most often encountering unexpected costs or having to switch medications from a drug that wasn't covered.

Critics carped about the shortcomings of the twisted, complicated design of the standard benefit, the result of a political compromise aimed at keeping down the cost. Because private insurers aren't required to offer the standard plan, fewer than 20% of enrollees are covered by that standard package.

Still, to the consternation of Democrats and many seniors, most beneficiaries are stuck with the much-derided "doughnut hole," a gap in coverage that requires seniors who avoid catastrophic illness to pay their entire drug tab themselves once they spend $2,250 out of pocket.

Critics said a lot of seniors simply wouldn't sign up, a vexing problem for any voluntary insurance program. Back in 2002, 45% of Medicare beneficiaries lacked prescription-drug coverage for all (18%) or some (27%) of the year. Now, more than 90% of Medicare beneficiaries have drug coverage. In all, 22.5 million people are enrolled in what is known as Medicare Part D, including 6.1 million people on the Medicaid health-insurance program for the poor who were assigned -- with some highly publicized glitches -- to insurance plans by the government if they didn't choose one. Another 16 million have Veterans Administration or employer-provided coverage, often subsidized by the government.

Still, more than one in 10 of Medicare's 43 millions beneficiaries have failed to sign up for drug coverage, including more than three million seniors whose incomes are so low that they would have to pay little or nothing for it. "Everyone agrees that's a big concern," says Mark McClellan, who recently stepped down as Medicare's administrator.

An enthusiastic defender of Medicare Part D, Dr. McClellan says the past year demonstrates consumers "can be a powerful force in health care as they are in the rest of the economy, but they do need support." The government, he cautions, cannot skimp on telephone operators, easy-to-use software and the like if it wants patients to be more involved in managing their own care, as it says it does.

Critics said the drug plans would offer enticingly low premiums the first year, and jack them up the second year. Premiums for many are going to rise in 2007 -- but not sharply. An analysis by Georgetown University's Health Policy Institute of 10 plans that have enrolled nearly 70% of Part D beneficiaries estimated that average premiums in 2007 will be $3.10 a month higher (12%) for those who stick with the same plan.

Critics said the complexity of matching tens of millions of elderly Americans with private-insurance plans would overwhelm the government's bureaucracy, and it has proved to be challenging. More problems are likely to surface on Jan. 1 for seniors who switch plans. Robert Reischauer, director of the Urban Institute think tank, says, "For a highly complex new program, the government and the prescription-drug plans did a remarkable job of implementation. Did it work perfectly? No. Were there little inequities here and there? Yes. But they did an immense amount to make this program work."

Critics said the program would be expensive, so expensive that the Bush administration hid internal estimates before Congress voted, and that it would be a heavy burden on the federal budget for decades to come. It will be. The latest official price tag is $729.1 billion over 10 years, and Congress and the Bush administration didn't offset that with spending cuts or tax increases.

Partly because fewer seniors enrolled than Medicare actuaries projected, Part D will cost taxpayers about $30 billion this year, below the $43 billion originally estimated. Dr. McClellan predicts the official $48 billion estimate for 2007 will be marked down. That isn't only because enrollment is below projections but because prescription-drug plans are pressuring drug makers to hold the line on prices and prodding consumers to use cheaper generic drugs or brand-name drugs for which plans have negotiated discounts.

Democrats argue the program could be even cheaper if the government, rather than private insurance plans, used its clout to negotiate with drug makers. They have vowed to change the law to allow that soon after they take control of Congress next year. They talk about using the hoped-for saving to sweeten the benefit, perhaps eliminate the infamous doughnut hole.

They may have trouble delivering: The official congressional scorekeepers aren't persuaded that the government would actually save money if Congress repeals a provision that bans the Department of Health and Human Services from interfering in price negotiations between drug plans and drug makers. Unless Democrats can take credit for saving money, it will be hard to make the benefit more generous.

Commissioner Jim Poolman: North Dakotans Pay the Least in Auto Insurance in the Nation

Bismarck, ND – Insurance Commissioner Jim Poolman announced today that according to a recent report, North Dakota ranked the lowest in the country for combined average auto insurance expenditures. The report, which is issued by the National Association of Insurance Commissioners (NAIC), is titled "State Average Expenditures & Premiums for Personal Automobile Insurance in 2004".

Poolman said, "This is great news for auto insurance consumers in North Dakota and is consistent with previous years' reports. Our low rates show that the auto insurance marketplace in North Dakota is competitive and healthy."

According to the report, the combined average policy in North Dakota costs $562.45 per year, while the nationwide average is $837.86. Combined coverage is the total cost of liability, collision, and comprehensive coverage for a vehicle.

Average Auto Insurance Expenditures ~ 2004

Most Expensive
New Jersey ~ $1,221.08 ~ (1)
District of Columbia ~ $1,184.63 ~ (2)
New York ~ $1,171.62 ~ (3)

Neighboring States
Minnesota ~ $829.33 ~ (21)
Montana ~ $683.18 ~ (37)
South Dakota ~ $586.96 ~ (49)

Least Expensive
North Dakota ~ $562.45 ~ (51)
Iowa ~ $579.95 ~ (50)
South Dakota ~ $586.96 ~ (49)


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