Proposed Budget - Fiscal Years 2026-2027
On January 15, North Dakota Governor Kelly Armstrong released a two-year budget proposal for fiscal 2026 and fiscal 2027. The budget recommendation builds on the prior work of Governor Doug Burgum’s administration, while also making significant changes from the previous administration’s recommendation submitted on December 4, 2024. Governor Armstrong’s budget proposal calls for $19.90 billion in total spending over the biennium, a 20.5 percent increase from the previous biennium. The budget proposes $6.60 billion in general fund spending over the biennium, a 14.7 percent increase from the previous biennium. General fund revenues are estimated to be $5.55 billion over the course of the biennium, a 1.4 percent increase from the prior biennium. Oil tax revenues are projected at nearly $4.9 billion, approximately $828 million less than the revised estimate for the current biennium. The proposed budget leaves $230 million in the general fund ending balance and over $500 million in the Strategic Investment and Improvements Fund.
Proposed Budget Highlights
The governor’s budget recommendation includes historic property tax relief and reform, strategic investments in infrastructure and legacy projects, housing affordability and access solutions, and a school choice initiative. The budget proposal provides roughly $1 billion in new investments, while making spending cuts of approximately $600 million including through reducing staff and spending on new programs and construction that was not scheduled to begin until the end of the biennium. Highlights of the budget proposal include:
Property Tax Relief
- Provides a property tax credit of $1,550 per year for each primary residence
- Expands eligibility for the homestead tax credit program
- Provides a 3 percent limitation on local political subdivision budgets funded by property taxes
- Earnings from the Legacy Fund, the state’s sovereign wealth fund, would initially pay for part of the property tax relief and eventually cover all the cost
Housing
- Recommends a housing initiative package to address availability and affordability needs through new and existing programs
- Includes a new program to address needs through a public-private partnership structure
Infrastructure
- Includes a new Legacy Fund bonding package for the construction of a new state hospital in Jamestown, generational airport projects in Fargo, Grand Forks, and Dickinson, and for a Military Gallery at the North Dakota Heritage Center
Education
- Includes annual 2 percent increases in the K-12 integrated formula
- Establishes an Educational Savings Account (ESA) program to fund supplemental services that reimburses for approved services and supports and expands educational opportunities for public, non-public, and homeschool students
- Transfers funding from the Foundation Aid Stabilization Fund to the School Construction Revolving Loan Fund
- Provides a 9 percent increase to the higher education funding formula from the general fund
- Includes one-time higher education investments for Challenge Grants, Capital Building Funding, and the Maryville Old Main renovation
Other
- Provides funding for performance-based increases for high-performing state team members
- Supports the closure of the current defined benefit retirement plan, adequately funding the state’s obligation under the defined benefit plan and offering a new portable defined contribution plan to new state team members
- Aligns with the Gov. Burgum budget recommendation and proposes a change to the maximum balance calculation of the Budget Stabilization Fund
- Adds funding for technology investments
- Includes several initiatives to address overpopulation in the corrections system and to address facility needs
- Recommends Department of Human Services provider increases of 1.5 percent for each year of the biennium
- Invests in childcare programs and grants
- Added investments in behavioral health programs, including the expansion of Free Through Recovery, Community Connect and peer support; youth crisis and intervention; substance use voucher utilization; and rural crisis support
- Creates a new cabinet position, the Commissioner of Recovery and Re-Entry