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LETTER: Clarifying why a special session’s on

By Staff | Jul 22, 2016

By now we have all heard that Governor Dalrymple has called the ND Legislature back into special session on August 2 through August 4. I would like to address the reason for this decision.

When the legislature adjourned in early May of 2015, we did so leaving an ending fund balance of over $300,000,000. We did so because of the volatile nature of energy and agricultural commodity prices. As you know, we budget on a biennial or two year cycle and we use the recommendations of economic growth given to us by Moody’s Analytical, who is contracted by the Office of Management and Budget (OMB). Their economic forecast at that time was certainly more robust than many of us thought and that is why we built a stronger ending fund balance than what is normally the case.

As we all know, oil prices as well as the price of ag products took unprecedented decreases in the past year and Gov. Dalrymple exercised a 4.05% allotment to state agencies earlier this year to deal with the impact of that change to the state budget. It is important to know that the Governor has no discretion to add to or eliminate any agency from this process. Every agency must be accountable for the same percentage allotment. In addition, if additional revenue is available in other funds, the executive branch cannot transfer any of those funds without legislative action. Because of that, we need to reconvene to meet our constitutional requirement to balance the state budget.

It is my understanding that another proposal to reduce state agency spending of 2.5 percent for some state agencies is an option that we will consider in this special session. That said, we know that not every agency can make another round of reductions without creating some devastating consequences for providers across the state. For example, in the first round of allotments, long term care had to reduce their budgets by $25 million and we absolutely cannot expect them to be part of another round of cuts. We, as a legislature, can look at this from an agency by agency standpoint to decide where the additional savings might come from.

In addition, I believe we will consider transferring profits from the Bank of North Dakota (BND) to shore up the revenue side of the ledger. In my 20 years in the legislature, we transferred $70 million in each biennium of BND and State Mill and Elevator profits into the general fund until the past 4 biennia. We have not transferred any of these profits during the past 8 years because of the economic growth that took place in the state and instead allowed both of these entities to build stronger economic footings. This is another example of the legislature preparing for economic downturns and having the ability to deal with the situation.

At the completion of the special session, we will meet our obligation to balance the state budget and prepare for the next 2 year cycle that will soon be before us. I believe you can be confident that the revenue that we have is adequate to go forward and although it will not be at the same level as it has been in most recent times, we will come into session in January of 2017 with the 4th strongest economic forecast in my tenure in the legislature.

I hope this clears up any misunderstanding as to the need to call a special session. Thank you.

Jon Nelson,

District 14 Representative

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