North Dakota Gov. Doug Burgum on Wednesday outlined his budget plan for the next two-year cycle, noting increased funding to such areas as state employees' salaries and education, as well as ideas for Legacy Fund earnings.
In his first budget address to lawmakers, the governor noted $14.3 billion in total revenues and expenditures, with $4.6 billion in ongoing general fund items — funded in part by $1 billion in oil tax revenue. Lawmakers in 2017 set a budget for the current biennium of $13.6 billion with $4.3 billion in general fund spending.
If passed as proposed, Burgum's budget would be a record after lawmakers approved $14.2 billion in spending in 2015 — later revised due to a $1 billion shortfall in 2016 from sagging commodity prices.
Burgum's budget proposal comes after heavy cutting since then. The Legislature last session cut $1.7 billion from the general fund for the current biennium.
Office of Management and Budget Director Joe Morrissette told the Tribune that the budget proposal assumes a conservative outlook for oil, with steady oil tax revenue over the next biennium from "fairly flat" oil production — at 1.35 million barrels per day now, expecting "a little decline" amid seasonal, workforce and gas capture constraints.
In his proposal, the governor recommends $112 million for increased salaries to state employees, or 4 percent in the first year of the 2019-21 biennium, followed by 2 percent or up to 4 percent in the second year.
"They get a pool of dollars that equals 4 percent, 2 percent and then they can manufacture the additional 2 percent through salary savings," the governor told reporters Tuesday night. Cabinet and agency heads may adjust raises differently, he added.
"If they want to give somebody 2 and somebody else 6 in year one, they can do that," Burgum said. "This is not a peanut butter, everybody-gets-a-4-percent raise."
State employees did not receive raises from the 2017 session, but the Legislature did meet a $45 million increased cost of health care.
Republican and Democratic-NPL lawmakers alike have proposed pay increases to state employees. On Tuesday, Democrats unveiled a plan to offer $300 more per month in the first year of 2019-21, with a 3 percent raise in the second year.
Three Bismarck Republican legislators earlier proposed a similar plan, but with a 1 percent raise in the second year.
Burgum's proposal covers 15,673 full-time state employees, including those in higher education.
The governor also proposed a $4.5 million expansion of the Free Through Recovery program, which offers peer support for former inmates experiencing addiction. The program was created from a $7 million effort part of "justice reinvestment" from the 2017 session — a package of bills aimed at reducing recidivism and incarceration.
Burgum said Free Through Recovery would be expanded to other people, such as those on pretrial diversion or not in the criminal justice system.
"You don't have to have already ended up in the system to be able to have access to it because we think it can work for keeping people out of the system, which is one of the most effective things we can do, particularly if they have a substance use disorder," the governor told reporters.
The Free Through Recovery proposal is included in $19.1 million in proposed additional behavioral health spending from the general fund.
Funding for K-12 and higher education also sees increases in Burgum's budget proposal — a 2 percent bump for K-12 in each year of the new biennium, and a $90 million increase for higher education — with $40 million derived from Legacy Fund earnings for the latter.
Burgum stressed that none of the Legacy Fund's $6 billion principal will be touched in his proposal.
The governor outlined $300 million in "legacy projects," including a $30 million tracking network for unmanned aircraft systems, or drones; $55 million for an infrastructure revolving loan fund for local entities; and $50 million for the Theodore Roosevelt Presidential Library to be built at Medora, in a 2-to-1 private match that partners with the National Park Service.
The governor also proposes $35 million in Legacy Fund earnings be spent to replace the State Hospital at Jamestown and rebuild on the grounds.
Burgum's plan would allow for shuffling prison services for women incarcerated at New England to move to the Missouri River Correctional Center by Bismarck, and men held there to move to the former State Hospital, re-purposed as a minimum-security facility.
This plan would save at least $7 million per biennium, according to Burgum's proposal.
He also proposed $1.5 billion in road, water, technology and other infrastructure projects for 2019-21.
Senate Majority Leader Rich Wardner, R-Dickinson, has proposed Operation Prairie Dog to fund infrastructure projects throughout North Dakota by creating new "buckets" at the end of the stream of funds filled from oil tax revenue, capped at $280 million for funds for cities, counties, townships and airports.