BISMARCK, N.D. (AP) - North Dakota legislators who already are dealing with a massive budget shortfall learned Thursday they have even less money to spend due to a prolonged slump in oil and agriculture economies, a fiscal circumstance that Republican Gov. Doug Burgum called historic and “an incredibly difficult task” for lawmakers.
“No Legislature since the Great Depression has had to take this size of a percentage out of the budget,” Burgum told House and Senate appropriations committees.
The newly updated forecast of the state’s tax collections show North Dakota’s treasury expects to collect $46.3 million less than previously expected before its current two-year budget period ends on June 30. The state treasury also is expected to collect $103.2 million less than previously expected for the next two-year budget, from this July through June 2019.
Burgum’s preferred spending plan to North Dakota lawmakers in January recommended $4.6 billion in spending over the next two years, or about $159 million less than proposed by then-Gov. Jack Dalrymple in early December.
Before Burgum’s preferred budget, North Dakota’s Republican-led Legislature already had lowered expectations on tax collections by more than $170 million for the current two-year budget due to the energy and commodity slump. The new forecast is based on the Legislature’s assumptions, said Pam Sharp, the state’s top budget writer.
A huge drop in North Dakota tax collections has had the state scrambling to make up for shortfalls to the state treasury for the past two years. Expected revenue from tax collections has missed the mark by more than $1.4 billion since then due to a slumping economy.
Those shortfalls have been plugged by draining a rainy-day fund, massively cutting most government agencies and skimming profits from North Dakota’s state-owned bank.
North Dakota’s expected tax collections have dropped more than $50 million so far this year,
Lawmakers have been holding off on major appropriations bills this session until they knew how much money they would have available to spend.
House Majority Leader Al Carlson said the state would balance its budget without raising taxes. Further cuts to state agencies, dipping into other state savings accounts and more state employee layoffs are possibilities.
“All those things are on the table,” he said.
Democratic Senate Minority Leader Joan Heckaman also said that “everything is on the table,” although her party does not support any layoffs of state employees.
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