Skip to main contentSkip to main content
You are the owner of this article.
You have permission to edit this article.
Edit

North Dakota state revenues see 'positive track' in new budget cycle

  • 0

State revenues have started off well in the first quarter of North Dakota's 2021-23 budget cycle.

July through September, taxes to the state's general fund have come in 8.7% over the forecast the 2021 Legislature adopted, or about $61 million.

Office of Management and Budget Director Joe Morrissette called the early trend "a very positive track."

Sales taxes, the general fund's largest revenue source, are 10.5% over projections for the budget cycle so far, or more than $24 million.

Morrissette

Morrissette

Oil taxes, which are capped at $400 million for the general fund, have come in 22% over forecast through September, or nearly $70 million, according to an update to state lawmakers.

Oil was "kind of a wild card" in the forecasting process, due to price volatility and a production collapse amid the coronavirus pandemic, Morrissette said.

"On the oil side, we are tracking very close to the forecast in terms of production, but significantly over in terms of price," the state budget director said.

North Dakota oil fetched $74 per barrel last month, the highest price in over a year, according to the budget office.

In recent months, the Legacy Fund, North Dakota's voter-approved oil tax savings account, has received its highest monthly deposits of oil taxes since the pandemic emerged in North Dakota in March 2020.

October's deposit, set to occur Thursday, will be more than $49 million, according to state treasurer's Director of Finance Ryan Skor.

Motor vehicle excise taxes have continued a yearlong trend of being 8%-10% above forecast every month, Morrissette noted.

Auto inventory, though lower in stock, has sold quickly at a strong price, and recreational vehicles also have been selling at high levels, he recalled from speaking with an auto dealers representative on a state revenue forecasting advisory panel.

The revenue update, issued Tuesday, comes as the Legislature's budget writers are reviewing proposals for spending the state's $1 billion of federal American Rescue Plan Act coronavirus aid.

The Legislature will meet in a reconvened session next month to divvy up the money and to approve new legislative districts.

In his "Accelerate ND" proposal for the Rescue Plan money, Gov. Doug Burgum also recommends tapping the state's $410 million surplus from the 2019-21 budget cycle.

Sen. Ray Holmberg discusses the budget planning process for North Dakota's federal American Rescue Plan Act coronavirus aid.

The general fund had a $1.1 billion ending balance from the last two-year budget cycle, which left more than $400 million in excess of what the Legislature estimated.

The governor wants that overage to go toward two-year income tax relief, economic development and an infusion to the state pension fund.

Wardner

Rich Wardner

But that money most likely will be set aside until the 2023 Legislature, according to Senate Majority Leader Rich Wardner, R-Dickinson. He noted "a lot of uneasiness out there in the economy as we're going forward."

"Do you recall last biennium? Do you remember we were above forecast in oil revenue?" he said. "We were above forecast in general fund, and then the COVID hit. And thank goodness we were above forecast, because we were able to get through."

He expects the Legislature to take up tax relief in the future, but it likely would be something permanent.

Presentations to the House and Senate appropriations committees are set to wrap up Wednesday. The panels will meet next week to narrow the proposals to what will advance in a bill draft. 

Reach Jack Dura at 701-250-8225 or jack.dura@bismarcktribune.com.

0 Comments
0
0
0
0
0

Get Government & Politics updates in your inbox!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News