Gov asks ND agencies to hold spending even

Associated Press
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North Dakota Gov. Jack Dalrymple speaks on Monday, April 16, 2012, to a group of North Dakota state agency administrators in the Brynhild Haugland Room of the North Dakota Capitol in Bismarck, N.D., about the guidelines they should follow in drafting budgets for the 2013-15 biennium. Dalrymple asked the agency directors to prepare budgets without increasing their current spending levels, and to identify possible 3 percent reductions. (AP Photo/Dale Wetzel)

BISMARCK, N.D. (AP) — North Dakota agencies should stick to their current spending levels when preparing new budgets for the next two years and also provide options for possible cuts, Gov. Jack Dalrymple said Monday.

Dalrymple delivered the directive Monday at a meeting of state agency administrators. He said it would not affect proposals for one-time projects, such as road construction and state aid for North Dakota's flood-stricken regions.

State spending has expanded dramatically in recent years as revenues from oil production have fattened North Dakota government's coffers. The state's current two-year, $4 billion general fund budget has risen almost 60 percent in the last six years.

Dalrymple said his instructions did not indicate a belief that North Dakota's economic growth is slowing.

"These times of economic prosperity is when you need to be most careful about allowing expansive state government to grow," Dalrymple said in an interview. "We're trying to maintain an efficient, well-run state government, regardless of the fact that our revenues appear to be very good."

Dalrymple's directive marked the start of state agencies' preparations of their spending requests for the 2013-15 budget period.

Agencies normally must finish their work by July 15, although the state budget office has authority to grant time extensions. They will prepare budgets based on current spending levels, identify options for cutting their outlays by 3 percent, and also suggest a package of optional increases that will be ranked in order of importance.

The governor will use the blueprints to draft his own spending plan for the Legislature, which lawmakers will get during the Legislature's organizational session in December.

Sen. Raymon Holmberg, R-Grand Forks, the chairman of the Senate Appropriations Committee, said the work is helpful when lawmakers decide which spending choices to approve.

"Some of (the governor's choices) we like, and we accept them, and we fund them, and others we don't like," Holmberg said.

Todd Sando, chief engineer for the state Water Commission, said the guidelines should not hamper flood control and water supply projects. They are largely financed by a state trust fund that collects a portion of North Dakota's oil revenues.

"We can put adjustments in, if we need more help," Sando said.

Carol Olson, director of the state Department of Human Services, said a no-growth budget would be difficult to manage.

North Dakota's improving economy means the federal government will pay a smaller share of the cost of Medicaid and other assistance programs, which will require a state spending increase to keep the same level of services, Olson said.

"I'm not sure how we're going to work this through to keep the services even," Olson said. "We haven't even started looking at the numbers yet."

Dalrymple, a Republican, is running for re-election this fall. His Democratic opponent, Ryan Taylor, said Monday that the budget guidelines would not help North Dakota communities struggling with flood-protection issues and the effects of rapid population growth in the state's western oil-producing region.

"His budget guidelines fall far short of reality in making improvements to our growing schools, rapidly deteriorating roads, the severe housing shortage, need for greater public safety and emergency services, and for communities in need of real disaster planning," Taylor said in a statement.

Dalrymple said the state had already provided "extraordinary funding" for flood recovery, road repairs and aid to schools.

"Our commitments to providing flood protection and addressing the impacts of the oil-producing counties will not waver," the governor said.