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December 5, 2022

$380M budget surplus projected for North Dakota

Predictions from the North Dakota Office of Management and Budget (OMB) show a $380 million budget surplus when the biennial budget ends June 30, 2023.

The state is expected to take in $5.5 billion during the budget term, which began in July 2021, according to a presentation by Joe Morrissette, OMB director to the Government Finance Committee. Expenditures are projected at $5.1 billion, he said. The North Dakota Legislature meets in odd-numbered years and enacts a biennial budget that begins on the following July 1.

The Legislature approved a $211 million income tax cut in a special session last November that will eliminate the tax for 300,000 North Dakota taxpayers and reduce the tax for 200,000 taxpayers. Revenue predictions are $147 million over forecast and are offsetting the tax cut, Morrissette said. Some of the increase is from COVID-19 relief and some is because of an increase in the state’s Legacy Fund, he said.

The state still has about $9.5 million in its coronavirus relief fund that needs to be obligated by December, Morrissette said. Up to $12.4 million of any leftover funds could be split between the Department of Human Services, the Department of Corrections and Rehabilitation and the Adjutant General for payroll purposes if the OBM director determines they are available, according to House Bill 1505.

North Dakota’s cities were given $53.2 million split between fiscal year 2021 and 2022, Morrissette said. Of the 354 cities deemed eligible by federal officials, one city no longer was organized. Four cities declined the funds and asked it be returned to the state. The total amount was $21,000. Twenty-four cities did not respond, and $346,000 would be split among the cities participating, Morrissette said.

The OMB hired a temporary employee to handle the allocations to the cities.

“We might ask for money from the state fiscal recovery fund to pay that cost and reimburse that salary expense,” Morrissette said.

North Dakota received $1 billion in federal relief and has spent $25.3 million. The state also has applied to the federal government for approval of two capital projects: broadband and career and technical centers.

The OMB begins work on the 2023-2025 budget with agency meetings in late February or March, Morrissette said.

An initial forecast could be completed by mid-April with budget guidelines released by late April or early May, he said.

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