On January 27th, after the Legislature released it's revised revenue numbers, we asked the question "Is it North Dakota's Turn For Austerity?"
Today, with the release of the final numbers that the legislature will use for budgeting we got that answer:
YES.
Another $1 billion dollars is being removed from the projected revenues - that is on top of the $4.5 billion removed from the Governor's projections in January by the legislature.
But it seems that the austerity is going to be directed at the wrong part of the budget.
In the Forum article on the latest budget numbers Carlson is quoted as saying:
Dalrymple said most of what was proposed in his $7.2 billion general fund budget in December “is still very possible.” Carlson said proposed building projects will take the biggest hit in the budget.
This statement jives with our analysis of the half-time budget two weeks ago, however, as we said that the reductions to spending were being done to the wrong areas of the budget:
The legislature has to this point taken action to cut "one-time spending" by 50% while total on-going spending is staying even with the governor's plan with a 8/10th of a percent increase.
While there may be a deeper plan in the works, one has to question the wisdom of paring back on one-time projects that supposedly were vital 6-months ago in favor of pushing forward with higher on-going spending increases.
One would hope that with money in the bank, and future revenues in question the reverse of this situation would be true. Reducing on-going spending due to reduced on-going revenues and maximizing the "one-time spending" using money in the bank for the areas that need it, would seem to be a more appropriate course of action.
The legislature should minimize the need for future revenues by reducing on-going spending and addressing the needs now so that they do not have to be addressed later.
