It’s just over 24 hours since the North Dakota Legislature adjourned the 65th Legislative Assembly and the story is budget, budget, budget. And, as we’ve warned here on The Minuteman, the outlook going forward has the potential to be very grim between now and the 2019 session.
The numbers to prove this were broke down by the North Dakota Watchdog Network today. Here’s the breakdown on funds the Legislature raided:
"$200 million from the Legacy Fund Earnings
$183 million from the Property Tax Relief Fund…
$248 million from Strategic Investment and Improvement Fund
$160 million from the Foundation Aid Stabilization Fund for K-12 Education (money which would otherwise have come from the General Fund)
"That is $791 million pulled from reserve funds, and that is after the Budget Stabilization Fund was drained to prop up the 2015-17 budget."
As was pointed out by House Minority Leader Corey Mock (D – District 18) yesterday in his concluding remarks on the House floor, this amounts to nearly 20% of the entire budget.
We’re not talking chump change here. This is significant. But just as significant, and perhaps even more, is the point made by the North Dakota Watchdog Network that legislators created a budget that leaves just a $50 million dollar ending fund balance:
"As passed, the budget plans for a $50 million ending fund balance. That is not much considering that monthly shortfalls have averaged between $12-18 million each month in the last two years.
"There is no safety net. There are $0 in the Budget Stabilization Fund."
This leads to a whole bunch of questions moving forward.Will oil prices rebound?And if not, how would the state handle another budget shortfall?What would it take to realize the state shouldn’t budget off of projections and should move towards budgeting off of actual money in the bank?Will legislators learn not to base the budget on oil?If this budget turns to disaster, what will the 2019 Legislative Session look like?Are the tax hikes that were avoided this session inevitable next session with a legislature that is reluctant to make deep cuts?The North Dakota Watchdog Network is right… there is "No Room for Error" in this budget. And with that is their prediction:
"It is highly likely that Governor Burgum will be forced to make executive cuts in the next two years.
"And, as stated over and over, if things do not get much better, 2019 legislative session will make 2017 look like a cake walk."
I hope they’re wrong, and I hope we are wrong. Because if not, there’s tough decisions to make and tough times ahead for North Dakota and its people. And why? Because enough of those in the 65th Legislative Assembly decided that taking a gamble and kicking the can down the road was easier than making some tougher decisions now. That’s always the easy thing to do when you’re spending someone else’s money.