Oil is a huge part of North Dakota’s budget. Last calendar year more than half of the revenues collected by the Tax Department were direct oil tax revenues (not counting indirect impacts on things like the sales tax). So with oil prices faltering, some policy makers are worried.
But Governor Jack Dalrymlpe’s office doesn’t seem worried enough to turn off the spending spigot. “Record spending anticipated in governor’s proposed budget,” reports the Bismarck Tribune.
Dalrymple will be delivering his biennial budget address later this morning. In advance of that, let’s get some perspective on where we’ve come from in terms of spending.
Record spending isn’t an unusual concept in North Dakota. The chart below, compiled by Legislative Council, shows total spending since the 2003-2005 biennium broken down into general fund dollars, special fund dollars, and federal dollars. In the current biennium total appropriations made by the state (which include all three categories) was over $13.7 billion. Looking at general fund dollars alone, this biennium saw a more than 59 percent increase over the previous biennium.
That’s a scary amount of spending increases, especially given that North Dakota’s is a commodity-based economy. Energy prices and crop prices fluctuate a great deal, and that wreaks havoc with revenues.
Usually those sort of concerns are shrugged off by policymakers who talk about one-time appropriations vs. on-going appropriations. Which is fair, I suppose. If you spend to build a highway in one biennium you don’t appropriate that money again in the next biennium. Except, even if we split out one-time appropriations from general fund spending, we still have a 91 percent increase in on-going appropriations since 2007:
What’s more, the increase in on-going General Fund spending has nearly matched the increase in general fund revenues. Through September of this year, General Fund revenues have increased 113 percent since the 2007-2009 biennium. Meaning that while on-going general fund spending has nearly doubled, general fund revenues have more than doubled. But we’ve basically spent every dollar of general fund revenue increases. On on-going spending to boot.
Here’s the biennium-to-date General Fund revenues compared to the previous three bienniums: