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Ryan Johnson, Published December 05 2012

Dalrymple unveils $12.8 billion North Dakota budget

BISMARCK – Gov. Jack Dalrymple unveiled his budget recommendations for the next two years Wednesday, calling for $12.8 billion of spending with proposals to enact permanent tax relief, provide an additional $102 million for Fargo-area flood control projects and invest $2.5 billion in transportation upgrades across the state.

The proposal, which will guide legislators through the process of drafting a budget in the next session that begins on Jan. 8, also makes the case for additional funding for local school districts and the North Dakota University System, and would bolster the state’s law enforcement and public safety.

If approved, Dalrymple said, his plan would be a 9.4 percent increase per year for ongoing state expenditures during the next biennium that starts July 1. He said much of that new spending will cover increased costs to continue current services, meaning his budget has a discretionary increase of 5.2 percent each year from the general fund.

Here are the highlights of Dalrymple’s recommendations:

Tax relief

Legislators reduced the local property tax burden by $342 million during the 2011 legislative session by increasing state funding for K-12 education, offsetting about 75 mills in school district levies. Dalrymple’s plan calls for lowering taxes by an average of another 60 mills, as well as permanently adding the property tax relief into the school funding formula.

Together with the 2011 reductions, he said, North Dakota property owners would save $714 million in the next biennium.

The budget also offers $100 million in individual income tax reductions on top of the $210 million of cuts during the last two legislative sessions, as well as $25 million in further corporate income tax relief. Dalrymple said the plans would amount to taxpayer savings of $2.1 billion since 2009 by the time the next biennium ends June 30, 2015.

Infrastructure

Dalrymple’s budget plan includes $2.5 billion for statewide transportation upgrades, including more than $1 billion for one-time investments above regular Department of Transportation funding. The bulk of the money would support Oil Patch needs, including $300 million to convert two-lane highways into four-lane roads starting with U.S. Highway 85 between Watford City and Williston, and $142 million to help counties and townships repair truck traffic-damaged roads.

The proposal makes the remaining $598 million in the highway fund available for other parts of the state, as well as $100 million for non-oil counties, cities and townships.

Dalrymple’s plan also would provide $102 million to support Fargo-area flood control projects, $60 million for protection and home acquisitions in the Souris River Basin and $21 million for flood protection work in Valley City, Fort Ransom and Lisbon.

Education

The budget calls for a $549 million increase in K-12 funding, with $372 million used for local property tax relief and the rest covering added costs of increased enrollments, transportation and per-student payments.

Dalrymple’s plan also supports more investment in higher education, including $29 million for a new science, technology, engineering and math building at North Dakota State University and $68 million to expand and renovate the University of North Dakota’s School of Medicine and Health Sciences.

The higher education funding formula would be revamped, funding institutions based on completed courses rather than class enrollment, and an $89 million funding increase would cover higher costs, $21 million to transition to the new funding formula and an additional $6 million for two state scholarship programs.

Health and safety

Public safety would get a boost under Dalrymple’s plan, with an additional

$3.8 million for 15 new Highway Patrol troopers and $6.6 million for the first phase of a new law enforcement training center. The Industrial Commission’s Oil and Gas Division would get $4 million to add 23 new positions, including petroleum engineers and inspectors who ensure proper practices at drilling and well sites.

Dalrymple backed requests from the attorney general and judicial branch for more positions to strengthen the Bureau of Criminal Investigation and district courts.

The budget also would cover the loss of $93 million of federal funding for Medicaid, a result of the state’s growth in per-capita income, and would continue full funding for veterans programs that have seen federal cuts.

Housing

The state has been challenged in keeping up with housing needs in the midst of a strong economy and population growth, Dalrymple said, and his plan would bolster the Housing Incentive Fund created in 2011. Under his proposal, the fund would offer $20 million in state income tax credits for residents and businesses that contribute, and the money would be used to provide low-interest loans to developers who build housing for low- and moderate-income residents.

Dalrymple also proposed a $30 million transfer to the fund to boost money available for new housing projects, and his budget calls for an additional $12 million in Flex PACE funds that would support an estimated

$125 million in private housing development.


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Readers can reach Forum reporter Ryan Johnson at (701) 241-5587