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10 easy lessons in state budget basics

By Staff | Jan 27, 2017

The state budget is the centerpiece of every legislative session, and this session the process is more complicated than usual. There are two sets of budget bills reflecting different budget assumptions, and there are two additional budget frameworks, one each from the new governor and one from the legislative leadership.

, It’s a little bewildering.

Here are some points to keep in mind as budget building proceeds at the North Dakota Legislature.

1: Budget work continues throughout the session.

2: Draft budgets are interesting, but pretty nearly meaningless. At last four of these have been floated in this session; a couple have already sunk.

3: Budgets depend as much on revenue forecasts as on spending assumptions. Republican leaders in the legislature have a much leaner forecast than either Gov. Jack Dalrymple, whose projected budget is the guideline most often cited, or Gov. Doug Burgum, whose calls for more cuts caused consternation last week.

4: Budget suggestions that originate in the governor’s office are important but they are purely advisory. Legislators determine where money will be spent.

5: Some legislators are more influential than others when it comes to budgeting. Budgets are considered first in Appropriations committees in each house. The Senate committee has 14 members, 11 Republicans and three Democrats. In the House, the committee has 22 members, 19 Republicans and three Democrats. The committee chairs are especially influential. In the Senate, that’s Ray Holmberg of Grand Forks; in the House, it’s Jeff Delzer of Underwood. Republican leaders, Al Carlson of Fargo in the House and Rich Wardner of Dickinson in the Senate, also have influence on budget matters.

6: There’s not a whole lot of flexibility in the budget. Carlson has developed a budget lesson that he likes to share. “It’s all about the three eights,” he says. These are educATE, medicATE and incarcerATE. This is an exaggeration; jails really don’t cost that much money. Public safety takes less than 4 percent of the budget. Education at all levels takes about 27 percent, and so does human services. Transportation is the other big budget item, 23 percent. These figures represent overall spending.

7: Spending from the state general fund gets more attention than other spending. The general fund is made up largely of taxes paid directly by North Dakota citizens and businesses. General fund spending amounts to 42.4 percent of the total budget. Funds from the federal government make up 25.6 percent of the total budget. Spending from special funds – much of it for transportation, amounts to 31.9 percent.

These figures are from the budget developed by former Gov. Jack Dalrymple, which serves as a guideline for budget discussions. It is by far the most detailed of budget proposals so far advanced, and will almost certainly remain that until the final budget is approved.

8: You can’t spend money you don’t have, as Carlson is frequently heard to say.

9: The state has sources of money that might be tapped. The Dalrymple budget taps the Legacy Fund, for example. This was built from taxes on oil and gas production. There’s also a foundation aid stabilization fund that likely will be used to meet public school expenses – but probably not to ease budget woes in higher education.

10: Don’t expect any of this to be finalized until the end of the session. Budget work is last-minute work.

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