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Senate busy on revenue projections

The North Dakota legislature has been busy determining the various priorities of the state over the past month, but when it comes to how those priorities will be paid for the picture hasn't been too clear.

Legislators hope the new revenue projections, which will be presented on Monday, will give them a better picture of how much can be spent over the next two years.

"It's going to set the stage," said Sen. Rich Wardner, R-Dickinson, who serves on the Senate Appropriations Committee. "If what we think is true, we know that the revenues are going to go down, we just don't know how much."

The largest factor likely to affect the new revenue projections is the lower price of oil, Wardner said.

As oil production in the state slows, not only will oil tax revenues be affected, but so will income and sales tax revenues, Wardner said.

Wardner said it is good the state has taken a conservative budgeting stance in the recent past because it makes weathering the drop in oil revenues easier.

"It's better to be more on the conservative side. That's the way we've operated for years and it's really been good to us," Wardner said. "We were somewhat conservative last time, but then the price of oil skyrocketed. ... Nobody, nobody expected oil to go to $140 a barrel."

Wardner said it's important to acknowledge there were a lot of things that happened in the last biennium and it wasn't limited to the increase in oil production. There was also the record setting commodity prices. As a result, tax revenue was greater than it will likely be in the next biennium.

"There's going to be those that want to spend every cent that we have and there will be those who don't want to spend anything, they'll want to axe everything," said Wardner, who added the appropriations committees in both houses have their work cut out for them.

Rep. Shirley Meyer, D-Dickinson, said things in the House and the Senate have slowed to a crawl in anticipation of the new projections.

"We have been in a holding pattern waiting for this new budget forecast," Meyer said. "We've got a lot of bills to get out of appropriations."

And a lot of those bills may not look the same when they leave the Appropriations Committees, Wardner and Rep. Frank Wald, R-Dickinson, who serves on the House Appropriations Committee said.

"The House Appropriations Committee is very cautious and we're going to be very deliberate on spending increases," Wald said. "The word is sustainability. There's no point in putting money we can't sustain the next biennium in."

Wald said 75 percent of state agency expenses are payroll and that is one of the first areas cuts to the budget will be made. New employees probably won't be happening as a result, Wald said.

"If you're going to go after the big bucks, you got to go where they're at," Wald said.

Wardner said the one-time spending bills will be looked at closely and will likely be the first to go.

Another possible casualty of lower revenue projections is Gov. Hoeven's suggested $300 million for property tax relief.

"If we have to cut a substantial amount of money, there might be some changes to the property tax bill," said Wardner, who introduced the bill.

Wardner said the new revenue projections will lead to spirited debate in committee hearings and on the floor, but that's all part of the business of the legislature.

The projections will set the table for the remainder of the season, Wald said, before reiterating the importance of sustainability.

"Every time you put additional money into a budget that raises the benchmark, that's why we have to be very cautious about how much we're going to spend," Wald said. "We have to be cognizant of what the cost is going to be to continue next biennium."