REPUBLICAN HOUSE VOTES TO DOUBLE STATE RAINY DAY FUND

Bismarck – N.D. The House of Representatives today passed HB 1429 which will double the state budget stabilization fund to $200 million. The budget stabilization fund is a special fund in the state treasury that can only be tapped if state revenues are running two and one-half percent below forecasts from the most recently adjourned legislative session.

“The budget stabilization fund is an investment in the future of our state,” said Rep. Ken Svedjan (R – Grand Forks). “The money that we put in the fund today will help to ensure that critical services our state provides will not be drastically cut in the middle of a biennium if we experience a shortfall.”

Any surplus in state revenues over $65 million at the end of a biennium must be transferred to the budget stabilization fund. The fund is currently capped at five percent of the state general fund balance which is approximately $95 million. HB 1429 increases the cap to ten percent of the general fund effective July 1, 2009.

House Majority Leader Rick Berg said, “The size of the surplus in state revenues allows us to adequately fund our priorities, give the people back some of their hard-earned money and prepare for a possible downswing in our economy.”

The budget stabilization fund, in theory, would provide the state’s agencies and institutions with enough money to operate for one month in a worst case scenario. “The fund, which has existed since 1987, wasn’t actually funded until the 2005 session when Republican leadership decided to restore the fund’s credibility by setting aside $100 million for a ‘rainy day,’” Berg said.

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