As Legislative Session Ends North Dakota Still Has More Revenues, and More Spending, Than It Did Before the Oil Boom
Today may very well be the last day of the 2017 legislative session. Lawmakers are hoping to be completed by this evening.
We’ll see if that happens, but we hardly need to reach the official end point to conclude that it has been a rough session for the lawmakers and the state. Profligate spending during the oil boom years led to a budget bubble which, thanks to the savage realities of arithmetic, had to be popped. Absent high oil prices, and high crop prices, our state couldn’t afford to keep going as it was.
This has prompted a lot of sky-is-falling drama from the usual suspects. Bureaucrats seeing their budgets cuts. Partisan Democrats and their mouthpieces looking for a hook for electoral gains. What has been created is a picture of near insolvency for our state.
You’d think, from some of the overheated rhetoric and political posturing, that we are now living in some destitute state.
This isn’t the truth, and you needn’t take my word for it. The latest report from the Office of Management and Budget shows that the state has collected over $3.6 billion in general fund revenues so far in the 2015-2017 biennium (which ends in June). While that total is down from the previous two biennia, which were heavily influenced by the state’s oil boom, it’s 38 percent more revenues than the last pre-oil boom biennium.
That’s what this chart, comparing cumulative general fund revenues for each month of the last five budget cycles, shows pretty clearly (click for a larger view):
The purple line is what you want to look at. It has come in consistently higher than the red line. Meaning revenues, post-oil boom, are still significantly higher than revenues pre-oil boom.
Post-oil boom spending will also be significantly higher than pre-oil boom levels. According to the Associated Press lawmakers are zeroing in on a $4.3 billion general fund budget for the 2017-2019 biennium. As you can see from this chart, that’s going to be a billion dollars or so more than the last pre-oil boom general fund budget:
The point? Even despite the end of the oil boom, and some rough years for crop prices, and a second consecutive legislative session of cuts, the State of North Dakota still has more revenue and a much bigger general fund budget than it did before the oil boom.
That’s needed context amid all the political drama playing out on taxes and spending.