Lawmakers Concerned About Overly Optimistic Revenue Forecast From Executive Branch
Tomorrow state lawmakers will get their last revenue forecast of their 80 day legislative session from executive branch Office of Management and Budget.
From that, they will have to try and craft tax and spending bills that will govern the state until the next biennium ends June 30, 2017.
[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]”I just hope it’s not roses and they acknowledge that ag and oil are struggling because if they don’t I think it’s likely we will be back,” a House lawmaker from western North Dakota told me.[/mks_pullquote]
It’s not an easy job, especially with ill-advised oil tax exemptions, triggered by low oil prices, potentially causing multi-billion dollar swings in revenues. March will more than likely be the third month where oil prices were below the per-barrel price for the so-called “big trigger” which would reduce state revenues by an estimated $4.4 billion in the next biennium. Unless oil prices recover, that trigger could hit on June 1st.
Suffice it to say that tomorrow’s revenue forecast is “the most important day of the session,” according to one lawmaker I spoke to tonight. But there is concern in the legislative branch over how accurate the forecast coming out of the executive branch will be.
“They seemed so far out of touch with reality last time it was unbelievable to many of us,” a House lawmaker told me referring to Governor Jack Dalrymple’s budget address to the Legislature back in December in which he called for a 12.7 percent increase in spending based on oil prices of $74 to $78 per barrel for the first year of the coming biennium and $79 to $82 per barrel for the second.
Nobody expects oil prices to hit those levels, and the Legislature has already trimmed about $1 billion from Dalrymple’s executive budget after releasing their own forecast.
A Senator from the eastern part of the state said that the Dalrymple administration doesn’t seem in touch with what’s happening in the state’s economy.
“I think the executive branch is in denial about the end of the oil boom,” he told me. “It’s not a bust and the sky isn’t falling but the boom is definitely over and we need to start behaving that way.”
But there are fears in the legislative chambers than an overly optimistic revenue forecast could result in too much spending and lawmakers needing to come back for a special session to make adjustments.
“I just hope it’s not roses and they acknowledge that ag and oil are struggling because if they don’t I think it’s likely we will be back,” a House lawmaker from western North Dakota told me.
“Let’s hope they have a better feel for ND economy [this time],” a House lawmaker told me. “It’s fine to under estimate revenues, it’s very troublesome to overshoot them in the next biennium.