Gov. Burgum outlines record 2-year budget plan for North Dakota, emphasizes workforce, flush finances

Gov. Doug Burgum on Wednesday sketched out a two-year price range blueprint emphasizing workforce recruitment and retention and North Dakota’s wholesome monetary outlook.

His price range handle to the Legislature outlined his proposed $18.4 billion proposal, which features a $5.86 billion basic fund, the state’s primary working fund. That will be an general report price range however consists of federal funding and comes amid current inflation. The 2021-23 price range is $17.8 billion with a $5 billion basic fund, together with federal coronavirus help.

The governor famous the state’s rosy monetary image, together with $3 billion in money reserves, which permits for myriad one-time initiatives, and a $718 million wet day fund. His price range plan additionally figures a $410 million basic fund ending stability when the subsequent two-year price range cycle ends in mid-2025. Higher-than-projected state tax revenues, notably oil taxes, created the scenario.

Key in Burgum’s blueprint is workforce improvement, initiatives to draw and retain employees in a state with tens of 1000’s of open jobs. 

“Each firm, each state is now competing for workforce,” he stated.

Burgum is pitching a state earnings tax aid plan on that entrance, proposing to remove state earnings taxes for lower-earning North Dakotans whereas shrinking taxes for increased earners to a flat tax of 1.5%, which Burgum stated would save taxpayers about $250 million yearly.

“The underside line is our state is doing simply extremely nicely, however when our state is doing nicely, our residents must also share within the prosperity,” the governor stated. 

His price range consists of $167 million proposed for workforce improvement, together with his $53 million “ND Works Funding Plan” he previewed this fall. 

That plan consists of $25 million to increase a state Commerce Division workforce recruitment initiative and Job Service digital job gala’s, and $20 million for a grant program for native governments and financial improvement teams to handle labor calls for.

Burgum proposes 4% and three% will increase in 2024 and 2025, respectively, for Okay-12 per-pupil funds — with 70% of these will increase going towards instructor salaries. His price range consists of $2.27 billion for Okay-12 funding.

The price range consists of “on-time funding,” or Okay-12 funding primarily based on present enrollment not earlier enrollment. State College Superintendent Kirsten Baesler in a press release stated she feels that is vital as a result of proper now “most state help per scholar comes a yr late.”

The governor is also asking for six% and 4% efficiency raises for state workers within the first and second years of the subsequent price range cycle, respectively, costing $211 million, plus $90 million in “focused fairness pay” for reinforcing salaries to be in step with the general market, for a complete of $300 million.

“At a time when inflation is skyrocketing, our state workers this yr are getting a 2% improve,” Burgum stated of state workers’ most up-to-date increase. 

The state additionally would cowl the $78 million premium improve for medical insurance and make no adjustments to the present plan, beneath Burgum’s proposal.

State worker turnover was 14% final yr, a 14-year excessive, based on Burgum. 

“It’s extra vital than ever to develop compensation options that entice and retain high expertise,” he stated. 

North Dakota United, which represents greater than 11,000 public workers and schoolteachers, is advocating for 8% wage will increase in annually.

The governor’s plan features a $250 million switch into the state worker pension fund to handle its unfunded legal responsibility of $1.86 billion. Two Home payments suggest the identical infusion. Lawmakers the final two years have been making ready to shut the state’s defined-benefit plan to new hires and transfer to a defined-contribution plan, or a 401(ok)-style plan. 

“If we don’t get on the off-ramp from the outlined advantages now, it will value North Dakota taxpayers billions extra down the highway,” Burgum stated. 

North Dakota United helps conserving the defined-benefit retirement plan, saying “it is going to be cheaper to repair the plan than to shut the plan.”

Burgum’s price range additionally consists of: 

• $2.4 billion towards getting older roads, bridges and different infrastructure, with over $1 billion derived from the Federal Bipartisan Infrastructure Legislation
• $600 million for water initiatives comparable to flood safety and regional water methods
• $161 million for a brand new ladies’s correctional heart in Mandan, a brand new campus on the Youth Correctional Middle
• $76 million for packages addressing youngster care affordability, availability and high quality
• $51 million for native parks and recreation grants, state parks and State Historic Society infrastructure
• $50 million for a vacation spot improvement fund to increase sights
• $15.5 million of elevated funding for Free Via Restoration peer-support dependancy companies
• $15 million for enhancing home- and community-based care companies, together with including greater than 12 full-time workers
• $3.4 million for home violence and abuse prevention and therapy packages

Republican majority leaders see widespread floor in Burgum’s suggestions.

“It is a very well-done price range, and I believe it’s going to align pretty nicely with legislative priorities,” stated Home Majority Chief Mike Lefor, R-Dickinson. He cited such points as tax aid, important state worker raises, pension reform, workforce and youngster care.

Senate Majority Chief David Hogue, R-Minot, stated the Senate and the governor are “carefully aligned” on workforce improvement. Burgum’s proposed state worker raises are also “fairly near the place the Senate will likely be,” he added.

Hogue additionally famous “alignment” or help for a brand new ladies’s state correctional facility and a $20 million match for a state navy museum.

Burgum’s proposals will get severe consideration, Hogue stated.

Home Minority Chief Josh Boschee, D-Fargo, sees “a whole lot of issues to love” within the governor’s blueprint, but additionally “one-time cash.” Democrats are “leery” of proposed earnings tax cuts, he added.

“That’s an ongoing type of income that we will rely on. Oil and gasoline fluctuates,” Boschee stated.

Republicans this fall detailed a plan to make use of $340 million of earnings from the state’s Legacy Fund oil tax financial savings within the 2023-25 price range cycle for the state to take over extra of the price of Okay-12 training — growing the state share from 72% to 85%, which might assist scale back native property taxes. 

Hogue stated the Legislature may finally present aid for each state earnings tax and property taxes, however possible not on the size as proposed.

Main the Legislature’s price range writing will likely be new Home and Senate appropriations committee chairmen, Rep. Don Vigesaa, R-Cooperstown, and Sen. Brad Bekkedahl, R-Williston.

Each panels may have a number of new members, too, as a consequence of important turnover within the Legislature this yr. Forty-one of 141 lawmakers are new members, although some have beforehand served. 

Wednesday was the final day of the Legislature’s three-day organizational session. The 2023 Legislature convenes Jan. 3, to last as long as 80 days. The 2021 Legislature used 76 days.