Gov. Jack Dalrymple has issued an executive order calling for lawmakers to return to Bismarck early next month for a special session to address a projected budget shortfall of more than $300 million for the 2015-17 biennium.
Members of Republican legislative leadership joined the governor Wednesday in outlining plans for the special session, which will begin at 9 a.m. Aug. 2 and is expected to last at least three days.
The move was an unusual step; before today only 14 special sessions have been called in state history.
“We all believe a combination of some targeted, short-term budget adjustments and the use of some contingency funds offers the best path forward to ensure that the budget is balanced on June 30, 2017,” Dalrymple said at a press conference in the state Capitol.
The decision is in response to an updated budget revenue forecast released Wednesday showing a general fund shortfall for the biennium just shy of $310 million. General fund revenues for 2015-17 are projected to be at $4.25 billion.
A bill will come from Dalrymple’s office outlining recommended budget cuts to state agencies. The bill will have to go through the delayed bills committee and have a hearing before going through both legislative chambers.
The plan includes the use of some dollars from contingency funds that require legislative authorization before they can be transferred, according to Dalrymple.
“There’s going to be surplus capital in the Bank of North Dakota,” Dalrymple said.
The nation’s only state-owned bank has recorded profits for 12 consecutive years, with profits of $130.7 million reported for 2015.
“I would expect we’re going to be asked to provide some capital,” Bank of North Dakota President Eric Hardmeyer said after the press conference, adding he’s not sure how much.
Human services and K-12 funding will be spared from what are being called targeted cuts to state agencies.
Dalrymple declined to name which agencies might make up a significant portion of cuts.
“I think we would take the approach that we’ll spread the cuts around,” he said.
House Majority Leader Al Carlson, R-Fargo, expects other lawmakers may have issues they intend to bring forward at the special session, but said those ideas should be saved for the regular session in January.
“Our intent will be to keep it very focused,” he said.
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Carlson said there have been several calls for a special session by Democrats in recent years which were rejected. He said having the new forecast provides a clearer picture.
Senate Majority Leader Rich Wardner, R-Dickinson, agreed, saying the goal is to get in, get the job done efficiently and gavel out.
“We feel that at this point something needs to be done,” Wardner said.
North Dakota Democratic-NPL Party chairwoman Kylie Oversen said in a statement the decision was a good move.
“We have been hearing countless stories from families across the state of the damage done by the budget cuts,” Oversen said. “We need the opportunity to address this before next session. Dem-NPL legislators are looking forward to working with leadership across the aisle to best address these challenges now.”
In February, Dalrymple addressed a $1.074 billion projected shortfall by ordering a 4.05 percent across-the-board budget cut to agencies that use general fund dollars, totaling $244.9 million.
About $497.6 million from the Budget Stabilization Fund’s $572 million balance was approved for future use at that time, along with ending balance dollars from the previous biennium.
A large portion of the shortfall has come from declining sales tax collections, much of which is tied to energy production in the western part of the state.
In May, Dalrymple also ordered state agencies to craft 2017-19 budgets at 90 percent levels of ongoing spending approved for the current biennium.
House Minority Leader Kenton Onstad, D-Parshall, said lawmakers should have been called in months ago to protect state programs such as human services.
Onstad said there are some lessons learned from the current downturn.
“The majority of our revenues are based on commodities, and they go up and down; so don’t be doing things that will hurt you down the road,” he said, citing cuts of corporate and personal income tax cuts in recent years that he said reduced revenue.
The last special session was held in November 2011, when lawmakers addressed matters including legislative redistricting and flood relief for areas hit hard across the state earlier that year.