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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