Gov. Doug Burgum is getting pushback over his proposed cuts for the 2019-21 budget. While revenue projections have improved, the outlook still points to the need for belt tightening. Some reserve funds were somewhat depleted during the last legislative session and the governor wants to give them time to rebound.
So Burgum wants smaller state agencies to cut expenses by 5 percent and larger agencies by 10 percent. He also wants all agencies to plan for an extra 3 percent "contingency" reduction in case oil and farm commodities suffer.
Not everyone thinks that’s the right course of action. Dr. Casey Ryan, a member of the state Board of Higher Education, warned the proposed cuts threaten the state’s ability to improve the higher education system. He argues the cuts could especially hurt the state’s two key research universities -- the University of North Dakota and North Dakota State University. "I can't go along with us just saying, ‘OK, we just need to see how we can cut things so we can be in line with what the governor is saying,'" Casey told other board members during a meeting last week.
Mike Ness, another board member, said, "It's going to take a lot of personnel out or it's going to take major programs from our system. I don't think we as a board should just accept that like we did last legislative session." University system CFO Tammy Dolan called the proposed cuts "extremely significant." Her office is still conducting an analysis of the proposed cuts, according to the Forum News Service.
Board Chairman Don Morton tried to calm the waters, but it’s apparent some board members aren’t ready to accept the cuts without a fight. They are concerned about the long-term impact on the university system.
Reservations were voiced about the impact of the cuts at another meeting last week.
Legislators on the interim Justice Reinvestment Committee were told the cuts could hurt the criminal justice system, including the juvenile court system, the Tribune's Jack Dura reported. Aaron Birst, legal counsel for the North Dakota Association of Counties, said the only place to cut is personnel. Don Wolf, state Supreme Court finance director, said more than 75 percent of the judicial budget is salaries and wages. The last legislative session saw about 35 full-time employees cut, or almost 10 percent of total court staff statewide. Birst also wondered whether criminal justice reforms launched last session could be maintained.
The Supreme Court doesn’t have to follow Burgum’s budget guidelines since it’s a separate branch of government. The court submits a budget proposal to the Legislature, but lawmakers are likely influenced by cuts being made to other agencies.
It’s obvious from the two meetings last week that there’s growing concern about the depth of the budget cuts. These officials can’t be the only ones concerned, they just had the first opportunity to make their cases. A lot can happen between now and January. In many ways Burgum is planning for the worst case scenario. If it’s a great summer on the farm and in the oil patch and prices are strong, Burgum may be able to take a different approach. While legislators can’t be excited about another round of cuts the alternatives aren’t attractive. Raising taxes is one of the last things legislators want to do. Reserve funds have been drawn down and there’s still a feeling that the Legacy Fund should be left alone.
Oil and gas tax revenues were encouraging in April, coming in at 22.8 percent above forecasted totals. Legislators cautioned, however, that tough decisions will be necessary.
There’s going to be a lot of maneuvering this summer as arguments are made for funding. Since it’s an election year there will be plenty of opportunities to debate the process and where cuts should be made.
If the rest of the year plays out as expected, Burgum has provided a solid blueprint for the state for the next biennium. It will be up to those opposed to his proposals to come up with a better plan.
Making exceptions to across-the-board cuts, deciding who suffers and who doesn’t, won’t be easy.