It was reported today that North Dakota’s Governor Doug Burgum has instructed state agencies to craft smaller budgets for the upcoming 2019-2021 biennium. In a nutshell, agencies with remaining appropriations of less than $5 million are being asked to cut by 5%. Larger agencies with remaining appropriations of $5 million or more are being called upon to cut by 10%. In addition, all agencies are also being asked to identify additional 3% “contingency” reductions “against volatile commodity prices”. You can read Governor Burgum’s address here or listen to it here.
As the 2017 Legislative Session was drawing to a close, we published an article in which I pointed out that the spendthrift legislature was preparing to kick the can down the road. And kick it they did. In order to make the current budget work, they had to reduce General Fund spending from $6 billion to $4.3 billion. And in order to hit the $4.3 billion mark, they had to raid reserve funds to the tune of nearly $800 million— a figure that House Minority Leader Corey Mock (D – District 18) pointed out was nearly 20% of the entire budget.
These aren’t the only examples of North Dakota’s recent budget problems. In early 2016, then Governor Jack Dalrymple ordered budget cuts to cover a $1 billion shortfall. Later that year, the Legislature was called into Special Session to address a $310 million shortfall.
While I can definitely appreciate Governor Burgum’s approach and willingness to reduce the size of government, I don’t believe the requested cuts go deep enough. In my opinion, Burgum is calling for a scissors, when in reality we need a sword. A key piece of evidence to illustrate such a point is the fact that, at one time in our state’s recent history, spending more than doubled over the course of ten years.
At the conclusion of the 2017 Legislative Session, we pointed out that the two Sacred Cows of the North Dakota Legislature are K-12 and Health & Human Services. So, should it be any surprise that two of the exemptions from Governor Burgum’s requested cuts are K-12 State School Aid and Medicaid?
The fact that K-12 isn’t on the chopping block is especially baffling. At the end of December, we published an article in which we proved that K-12 funding had nearly doubled over the period of time from 2006 – 2016. During that same time, enrollment had increased by just 13%. For a man who encourages “innovation in education”, it may come across as a bit disingenuous when K-12 isn’t being called upon to make the same sacrifices as everyone else. They have room for cuts too.
As shown in Governor Burgum’s Power Point, the big three of Health & Human Services, K-12, and Higher Ed make up a whopping 81% of the budget. Not only do I believe that all three should be subject to the budget sword, but there’s plenty of other examples where cuts can be made. For example, the state’s unconstitutional ethanol subsidies, our ridiculous state-sponsored North Dakota Tourism, or eliminating entire agencies like the Department of Commerce— just to name a few.
While we’re hacking away, perhaps we could also stop contributing funding to projects like the $100 million Theodore Roosevelt Presidential Library, whose board includes Senate Majority Leader Rich Wardner (R – District 37). And maybe we shouldn’t be creating new departments like North Dakota’s version of the Environmental Protection Agency— otherwise known as the Department of Environmental Quality. This department was created with the signature of Governor Burgum himself last Legislative Session.
Included in Burgum’s address today was this very troubling statement:
“In our approach to state government today, salaries and benefits comprise more than 50 percent of the state’s operating budget.”
Is it any wonder that Governor Burgum is calling for a 5% reduction to FTE’s for agencies with 20 or more them? Yet, is 5% enough? For example, according to my count, North Dakota’s Department of Public Instruction’s Employee Contact List shows 89 employees. To be fair, I’m uncertain if all of them are full-time. Nevertheless, are they all necessary? I don’t believe so.
Aside from my opinion that the requested cuts don’t go deep enough, there’s the sad fact that we probably won’t get through the 2019 Legislative Session without someone suggesting we raise taxes or raid the Legacy Fund. In the case of the Legacy Fund, it currently sits at over $4.3 billion— and growing. This will be a real temptation to those who just can’t stand slashing the budget.
Governor Burgum is right, making significant changes will require new approaches. I suggest he put down the scissors and grab the sword as he prepares to lead the charge. Not only will it make for smaller government, but it’ll benefit the taxpayer too.