North Dakota lawmakers set revenue figures that will guide their budget-writing actions during the first weeks of the 2019 session Wednesday with less optimistic oil and gas tax predictions than Gov. Doug Burgum used in his proposed spending plan.
The forecast, approved unanimously by both the House and Senate appropriations committees, assumes a $42.50 per barrel North Dakota oil price for the 2019-21 biennium, lower than both the executive forecast and figures from IHS Markit, a firm lawmakers hired to provide a second opinion on state revenues.
Burgum assumed prices would increase from $46 to $50 per barrel during the next two-year budget cycle, while IHS pegged them a few dollars higher. The lawmakers predict oil production of 1.35 million barrels per day, roughly in line with the other estimates.
The legislative forecast estimates oil and gas tax revenues will total roughly $4.06 billion in the next biennium, 12.2 percent less than Burgum's predictions.
Lawmakers were stung by a sharp downturn in oil prices and tax revenue a few years ago and came into this year's session sounding a note of caution.
Republican Sen. Ray Holmberg, chairman of the Senate Appropriations Committee, cited a recent "volatility" in oil prices for lawmakers' conservative forecast.
Wednesday's estimate predicts about $4.17 billion in total general fund revenues in 2019-21, splitting the difference between Burgum's spending plan and the IHS figures. That's almost 10 percent lower than what lawmakers predicted for the biennium that will end in June.
Burgum's spokesman Mike Nowatzki said they're "still confident" in their forecast. He also questioned the assumptions made by the IHS report lawmakers heard Monday.
Lawmakers will set another revenue forecast in March, closer to the end of the session.
"You can't hardly wait until March and lower it if you need to," said House Appropriations Committee Chairman Rep. Jeff Delzer, R-Underwood. "So we need to be conservative now."