Proposed Budget - Fiscal Year 2024-2025
On December 7, North Dakota Governor Doug Burgum released a two-year budget proposal for fiscal 2024 and fiscal 2025. The budget calls for $18.45 billion in total spending over the biennium, an 8.9 percent increase from the previous biennium. The budget proposes $5.86 billion in general fund spending over the biennium ($5.49 billion in ongoing expenditures and $374.9 million in one-time expenditures), a 17.5 percent increase. The largest categories of general fund spending for the upcoming biennium are health and human services (35.3 percent); elementary and secondary education (28.4 percent); higher education (12.7 percent); general government (9.1 percent); public safety (6.3 percent); and agriculture and economic development (4.4 percent). General funds represent 31.8 percent of the recommended state budget, while federal funds represent 31.5 percent and special funds 36.7 percent. The budget assumes general fund revenues of $4.59 billion, a 0.5 percent increase from the revised estimate for the current biennium. General fund revenues in the executive budget are reduced by two tax relief proposals and a proposal to shift a portion of the motor vehicle excise tax to the Department of Transportation to support state investment in road and bridge infrastructure. The general fund ending balance is estimated to be $409.8 million at the end of the upcoming biennium. The budget forecasts oil and gas tax revenues at $5.26 billion, a 12.6 percent decline from the revised estimate for the current biennium. Additionally, the state is permitted to spend $486.6 million in Legacy Fund earnings in the upcoming biennium. The governor recommends using 35.0 percent of Legacy Fund earnings for economic development and research; 31.0 percent for debt payments; 20.0 for legacy projects; and 14.0 percent for community and workforce development.
Proposed Budget Highlights
In discussing his budget proposals for the upcoming biennium, the governor said it includes nearly $170 million to address the state’s workforce shortage, increases support for K-12 education and teacher salaries, and provides over $3 billion for roads, bridges, water projects and other critical infrastructure. Additionally, he said the budget cuts individual taxes to save taxpayers an estimated $500 million over two years. The governor also noted the state’s financial position is strong and its reserves are full. Highlights of the budget include:
Addressing Workforce
- $167 million for a comprehensive package to address the workforce shortage.
- Includes funding for improving childcare programs; a Regional Workforce Impact Grant Program; a strategic marketing and recruitment campaign; a Workforce Innovation Grant program; an Energy Scholarship Pilot Program; and a workforce transition training program.
Historic Income Tax Relief
- Calls for eliminating the state individual income tax for three out of five North Dakota taxpayers.
- Remaining taxpayers will have their tax liability reduced.
- The proposal will lead to a 1.5 percent flat rate income tax, the lowest in the nation.
Investing in Infrastructure
- $2.4 billion investment to address aging roads, bridges, and other infrastructure.
- Includes $1.2 billion in federal funds from the Infrastructure Investment and Jobs Act and $1 billion in special funds.
- Proposal also includes funding for flood protection projects, upgrading the state’s correctional center for women, a new Public Health and Environmental Quality Lab, a new state hospital, and a state military museum.
Promoting Quality Education
- Recommends increasing the per-pupil rate for education aid by 4 percent in the first year of the biennium and 3 percent in the second year.
- Requires school districts to spend at least 70 percent of new dollars on compensation for educators.
- For higher education the budget includes $50 million in funding for challenge grants, which must be matched 2-to-1 with private sector funds.
Building Healthy, Vibrant Communities
- Proposes more than $51 million for state parks and recreation/historical sites.
- Calls for a Destination Development Fund of $50 million to be matched by the private sector.
- Also provides funding for a Rural Revitalization and Redevelopment Grant Program, a Rural Workforce Housing Program, and a Housing Incentive Fund.
Supporting State Team Members
- Includes $90 million in targeted pay equity funding based on a data-supported analysis to bring targeted agency salaries closer in line with the overall market.
- Recommends performance increases of 6 percent in the first year of the biennium and 4 percent in the second year.
- Recommends a 3.1 percent increase in full-time equivalent (FTEs) positions across state government and higher education.
Supporting Health Care and Human Services
- Invests over $30 million in behavioral health, with additional FTEs for more peer support specialists and mobile crisis services.
- Proposes the creation of a Child Protection Response Team to provide short-term, targeted, frontline staffing in areas experiencing challenges from staff turnover.
- Provides funding for four tribal health liaisons to help support tribal health needs.