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Published December 05, 2012, 11:07 AM

Dalrymple Budget Plan Includes Tax Relief, Big Spending Increases for Higher Ed, Public Works and Local Schools

Gov. Jack Dalrymple unveiled his budget for the next biennium on Wednesday, calling for permanent property tax relief, $102 million for Fargo-area flood control projects, a new funding formula for higher education and $2.5 billion in transportation upgrades.

BISMARCK – Gov. Jack Dalrymple unveiled his budget for the next biennium on Wednesday, calling for permanent property tax relief, $102 million for Fargo-area flood control projects, a new funding formula for higher education and $2.5 billion in transportation upgrades.

The governor’s proposal will help guide legislators as they draft a final budget during the legislative session that begins on Jan. 8.

He told The Forum on Tuesday that it’s a “very special time” in the state because booming energy production and economic prosperity have enabled North Dakota to address its “pressing” needs in a fiscally responsible way.

“This is going to be a time of great growth and expansion, and it’s really a new chapter in our entire state’s history,” he said. “I think that now’s the time to put our prosperity to work for us.”

Dalrymple officially unveiled his proposal in an address to legislators at the House Chamber of the Capitol building in Bismarck.

He said the budget has “large numbers,” especially in its plan to invest $2.5 billion in transportation upgrades, including major projects for Oil Patch roads as well as setting aside $598 million in the highway fund for non-oil counties, cities and townships.

The $102 million he set aside to help Fargo-area officials advance permanent flood control projects will come from the resources trust fund.

Dalrymple said his budget addresses the main priorities of the state, including $500 million in additional tax reductions during the next biennium and a proposed change to the school funding formula that would make permanent the property tax relief that lawmakers approved in 2009 and 2011.

Dalrymple said the state reduced property taxes by $342 million in the last session by reducing about 75 mills in local school district levies. For the next biennium, he proposes increasing state funding for K-12 education by $549 million, with $375 million used to lower property taxes in an average school district by another 60 mills. Added together with the 2011 reductions, he said North Dakota property owners would save $714 million.

The increased state funding for schools also would become a permanent part of the funding formula under his plan instead of the one-time tax relief plans that lawmakers have passed in recent sessions.

“We would like to build that into the permanent formula so that it continues on an ongoing basis,” he said.

Dalrymple’s plan also lends its support to investments in higher education, including $29 million for a new science, technology, engineering and math building at North Dakota State University and $58 to expand and renovate the University of North Dakota’s School of Medicine and Health Sciences.

Another change for higher education is a proposed new funding formula, developed by business managers and vice presidents at the state’s 11 public colleges and universities, that would fund institutions based on completed courses rather than class enrollment.

“It would be more transparent, it would be based on actual costs and it would be much more understandable for everybody, including the general public,” Dalrymple said. “We think that that’s something we need in higher education. We need to take some of the mystery out of it.”

Dalrymple proposed increasing ongoing funding for higher education by $89 million, an amount he said would cover the $12 million of higher costs to continue current operations, $21 million to transition to the new funding formula and increasing state scholarship programs by $6 million while also improving security and mental health services at all campuses.

He said his plan calls for a 9.4 percent increase in ongoing state expenditures during each year of the next biennium, which starts July 1 and runs through June 30, 2015.

Much of that new spending covers increased costs of Medicaid and rising school enrollment, meaning his budget has a discretionary annual increase of 5.2 percent from the general fund, Dalrymple said.

The budget also calls for $991 million in one-time spending from the general fund for infrastructure work and other projects over the next two years.

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