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North Dakota lawmakers bump up revenue expectations

North Dakota Republican Rep. Jeff Delzer chairs a meeting of the House Appropriations Committee at the state Capitol Thursday, March 14, 2019. John Hageman / Forum News Service

BISMARCK — North Dakota lawmakers bumped up their tax revenue expectations for the upcoming two-year budget cycle Thursday, March 14, with sunnier oil figures.

But the projections prompted criticism from Republican Gov. Doug Burgum, who called one prediction "inexplicable."

The revenue forecast adopted by the House and Senate appropriations committees will direct budgeting decisions in the final weeks of the 2019 session. Lawmakers are writing state agency budgets for the 2019-21 biennium, which begins in July.

Lawmakers predicted a small bump in tax collections to the general fund, and Burgum's office said the adopted forecast largely reflects one presented by the state's executive branch on Monday.

But the governor argued it “hides at least $200 million in Legacy Fund earnings that are required by the state constitution to be transferred to the general fund.” The new forecast shows $100 million in Legacy Fund earnings rather than the $300 million adopted in January.

“This lack of transparency is not only disingenuous, it’s a disservice to the people of North Dakota,” Burgum said in a statement.

Republican Rep. Jeff Delzer, who chairs the House Appropriations Committee, described the Legacy Fund portion of the forecast as a bookkeeping matter.

"Nothing's off the table, but that's all we want to use to balance the books," Delzer said. "We're not saying there won't be any money there, we're just saying we're only going to use $100 million of it."

Burgum has pitched using $300 million in earnings from the voter-approved Legacy Fund, which is fueled by oil and gas taxes, for projects like the Theodore Roosevelt Presidential Library and unmanned aircraft infrastructure.

The lawmakers also embraced a more optimistic outlook for the state's oil industry, a major driver of tax revenues. They predicted prices would be $48.50 per barrel in the first year of the biennium and $48 per barrel in the second year, while production would rise from 1.4 million barrels per day to 1.44 million barrels per day.

North Dakota produced a record 1.4 million barrels of oil per day in December. Figures for January are expected to be released Friday.

Republican Sen. Ray Holmberg, chairman of the Senate Appropriations Committee, called the forecast "conservative." Lawmakers are only a few years removed from a downturn in oil and agriculture prices that prompted a round of budget cuts.

The forecast was forged with input from the Legislature's own prognosticators. Lawmakers hired IHS Markit in late 2017 to provide projections on tax revenues after previous estimates badly missed the mark.

Delzer called Thursday's new forecast "pretty honest."

John Hageman

John Hageman covers North Dakota politics from the Forum News Service bureau in Bismarck. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Grand Forks Herald and Bemidji Pioneer.  

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