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Democrats lay out ‘compassionate and strategic’ plan to erase budget shortfall in front of ND special session

FARGO - Democratic lawmakers laid out a plan Thursday to erase the state's projected $309.5 million budget shortfall in a way they said would preserve a 12 percent property tax credit, leverage federal matching dollars for nursing homes, hospital...

Fargo state Sen. Tim Mathern, left, and Senate Minority Leader Mac Schneider of Grand Forks, were among Democratic-NPL lawmakers who presented a plan to balance the state's budget shortfall at a news conference on Thursday, July 21, at Fargo's historic downtown Depot. Helmut Schmidt / The Forum
Fargo state Sen. Tim Mathern, left, and Senate Minority Leader Mac Schneider of Grand Forks, were among Democratic-NPL lawmakers who presented a plan to balance the state's budget shortfall at a news conference on Thursday, July 21, at Fargo's historic downtown Depot. (Helmut Schmidt / Forum News Service)

FARGO – Democratic lawmakers laid out a plan Thursday to erase the state’s projected $309.5 million budget shortfall in a way they said would preserve a 12 percent property tax credit, leverage federal matching dollars for nursing homes, hospitals and other providers, and avert some cuts to mental health care and addiction treatment.

At the same time, the plan would leave about 87 percent of expected 2.5 percent across-the-board cuts, said Senate Minority Leader Mac Schneider of Grand Forks.

“It tightens our belt in a very strategic way,” Schneider said during a news conference at downtown Fargo’s historic depot building. “Our plan not only addresses critical needs, but adds up.”

The plan is expected to be introduced at the upcoming special session of the state Legislature that convenes Aug. 2. Gov. Jack Dalrymple earlier this month called the Legislature into special session to plug a budget gap that’s projected to widen to $309.5 million by the end of this biennium.

House Majority Leader Al Carlson said Thursday that the Democrats’ plan was "way premature."

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“They can do whatever they want,” the Fargo Republican said. “We’re going to get ours all fine-tuned before we release it, and then we’ll go from there."

Carlson said the Democrats' bill will get a look when it's introduced to the delayed bills committee, which, like the Legislature, is controlled by majority Republicans.

“They have every right to present an option,” he said. “They don’t even know what it’s an option to yet, but that’s OK."

Fargo Sen. Tim Mathern, a senior member of the Senate Appropriations Committee, is the author of the Democratic-NPL proposal.

He said the plan is both “compassionate and strategic,” allowing the state to continue to capture federal matching dollars. He said it may draw upon some of the state’s reserve funds, but leaves a cushion for the future.

“We have dollars set aside. Let’s use some of those,” Mathern said.

The across-the-board cuts would account for $151.2 million, the plan states.

However, it makes some exceptions. According to Mathern:

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  • The Department of Human Services and Department of Corrections would not be subject to the additional cuts and would be “held harmless.” That would cost $33.3 million and $5.4 million, respectively. It would also restore part of the Department of Human Services 4.05 percent budget cut made in February ($35.6 million).

  • It maintains $16.4 million to fund the 12 percent property tax credit. The Tax Relief Sustainability Fund is left untouched to preserve property tax relief in the 2017 legislative session, Democrats said.

  • It continues $35 million in funding to nursing homes, hospitals and entities that care for people with developmental disabilities. That will allow the state to gain $56 million in federal matching dollars.

  • It funds just under $3 million for mental illness and addiction treatment, and for children and families dealing with autism. Mathern said for the state to not leverage the federal funds would be “shooting itself in the foot.”

  • It continues $5 million to maintain child care assistance grants at 2015 levels.

  • To close the budget gap, $249 million would be transferred from the strategic investments and improvements fund to the general fund.

  • Another $25 million from the $75 million in the budget stabilization fund would be moved to the general fund.

  • And another $25 million would be transferred from Bank of North Dakota profits to the general fund.

“The bill is ready to be introduced into the legislative session,” Mathern said. “The goal is to lay it out on the table,” to tell “the citizens what’s at stake here. I hope the Republicans will do the same.”
Rep. Kathy Hogan of Fargo said the $3 million for mental health and addiction treatment, and help for those dealing with autism, isn’t a lot of money, but it is needed.

“We just want an honest discussion about serving the most vulnerable people,” Hogan said.

Fargo Sen. Tyler Axness said the plan directly helps “the people of the state, especially the most vulnerable.”

Schneider said he communicated the plan to representatives of the Republican majority Thursday morning.

While Democrats have called for a special session since March, Schneider said that difference of opinion is “in the past.”

The Democrats said their plan keeps more than $180 million in accessible reserve funds and leaves tens of millions in Bank of North Dakota profits untouched:

The plan would leave the state with a $50 million general fund balance, $50 million in the Budget Stabilization Fund, and a projected $83 million in the Strategic Investments and Improvements Fund. They added that by limiting the draw from the Bank of North Dakota’s profits to $25 million, at least $75 million in bank capital could be comfortably drawn from next session if needed.

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