March 5th, 2015 Let's Prevent a 2017 Budget Crisis While legislators await a new more formal revenue forecast due by the middle of March, it is wort

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March 5th, 2015


Let's Prevent a 2017 Budget Crisis


While legislators await a new more formal revenue forecast due by the middle of March, it is worth pointing out where things stand now that the legislature has returned from it's half-time crossover break.

According to the latest numbers, taking into account the actions of both chambers, there is currently a tentative budget deficit of $178 million dollars.

This is not shocking based on the fact that legislators revised their revenue availability down by over $5 billion earlier in the session. It is also tentative because there are still plenty of reductions from the governor's proposed budget to be made.

What is sort of shocking is where the budget reductions from the governor's proposal are coming from.

Page 2 of the summary report shows that reductions from proposed increases are coming from the so-called "one-time spending" category, not on-going spending. And the difference is stark.

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.

If the current revenue trend continues, and nothing is done to curtail on-going spending slightly this session, the 2017 legislature will not be an easy one.

Also, considering that taxpayers will problably not like what comes out of this session with income tax cuts will being minimal and the property tax buy-down program being rolled back, legislators should take preemptive measures to make the 2017-19 budget cycle less painful for everybody before it becomes a problem.

While waiting for the new numbers, legislators should consider what they would rather do - cut 5% from spending this time, and be ok next time, or roll the dice and risk having to make serious cuts?

In either case, addressing one-time needs with money in the bank is part of a prudent plan - making cuts there, but not in on-going spending - is not something that will sit well with those in the Bakken.


-Dustin Gawrylow, Managing Director

North Dakota Watchdog Network

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