LEGISLATURE DOUBLES STATE RAINY DAY FUND

Bismarck – N.D. The North Dakota Legislature has finalized work on HB 1429 which will double the state budget stabilization fund. 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.

“A strong reserve fund is the fundamental building block of our state’s financial foundation,” House Majority Leader Rick Berg said. “That is why Republicans have made increasing our state’s reserves a top priority this session.”

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.

“Now is the perfect time to put some money away,” Senate Majority Leader Bob Stenehjem said. “With this type of cushion in place, we are able to fund our priorities through the remainder of the session and are going to be in a better position to sustain that funding in the future.”

The legislature also recently passed HCR 3045 which will give the voters of North Dakota the power to secure future oil tax revenue in the Permanent Oil Tax Trust Fund. The initial $100 million in revenue from oil and gas production will be deposited into the general fund. Any revenue above $100 million will be deposited in the Permanent Oil Tax Trust fund. A three-fourths vote of both houses is needed to approve expenditures from the fund. The measure will be on the ballot in November 2008.

“The last time that our state’s economic outlook was as good as it is today, saving for the future was not as high a priority,” said Rep. Ken Svedjan, House Appropriations committee chair. “The money that we put in the fund today will help ensure that critical services our state provides will not be cut in the middle of a biennium if we experience a shortfall.”

Senate Appropriations Chairman Ray Holmberg said, “North Dakota is in an envious position this session. We are able to pay our bills, put money in the piggy bank and still give some money back to the people of our state.”

-30-