N.D. surplus for 2009 is $740 million to $1.2 billion
BISMARCK -- It's safe to say North Dakota's revenue forecast is understated, the state budget director told legislative appropriations members Wednesday.
Revenues and transfers into the state general fund are up 17 percent over the 2007 forecast, OMB Director Pam Sharp said. She estimates a projected ending fund balance--revenues minus approved spending--of $271 million on June 30, 2009.
The state's overall surplus, counting various funds that are off-limits to spending, could total $740 million by the end of this biennium.
Sharp's summary shows that the current estimated general fund ending balance next June 30 will be $271 million, the budget stabilization ("rainy day") fund created by the Legislature sits at $200 million and the Permanent Oil Tax Trust Fund will be $269 million. She said the $271 million figure is undoubtedly understated compared to what will actually happen.
Also on Wednesday, a state group that has been critical of the growing surplus predicted the total surplus will be more than $950 million by the time the biennium ends next summer.
Sharp told the Legislature's Budget Section that the forecast last year had been based in part on North Dakota oil selling at $37-$44 a barrel and a production level of between 116,000 and 119,000 barrels per day. Production has set a record, surpassing 150,000 barrels per day, and is selling for $125, she said.
OMB had estimated last year that the state's revenues and transfers through May biennium (since July 1, 2007) would have been about $1.06 billion, but they now total $1.24 billion.
The extra comes largely from a 9.4 percent variance in sales tax collections, which is 38 million more than expected; a 25.8 percent variance in individual income tax collections, which has generated $58.5 million more than projected, and an 86.7 percent variance in corporate income tax collections, or $54.5 million more than expected.
Though the state has collected more than $230 million in oil taxes through May 31, state law dictates all but $71 million be funneled into the Permanent Oil Tax Trust Fund.
Americans For Prosperity, an anti-tax group that is sponsoring a measure to cut the state income tax rate, said Wednesday that current trends point to a state surplus of $950 million by next June 30.
"AFP has been saying for several months that we anticipate a billion-dollar surplus," the group's state policy director, Dustin Gawrylow, said. "Many folks have challenged that claim (so) this report is designed to show the taxpayers and the voters exactly how we are able to make the claim."
He said the group's conservative estimate is $970 million and its "realistic" estimate is $1.2 billion. The figures combine an estimated ending fund balance, the rainy day fund and the oil tax trust fund.
Janell Cole works for Forum Communications Co., which owns The Dickinson Press.