CHICAGO — North Dakota legislators last week approved a fiscal 2012-13 $9.9 billion budget that reflects the state’s flush position, featuring $500 million of tax cuts, nearly $1 billion of infrastructure projects financed with cash, and $1 billion of reserves. For the third biennium in a row, the budget includes no borrowing.
North Dakota is enjoying rising revenue from nearly all its chief revenue sources, including sales tax, oil taxes, and motor vehicle fees, officials said.
“All of our tax types are doing very well,” said Sheila Peterson, deputy director of the state Office of Management and Budget. “Sales tax is a huge component of our general government revenue, and collections are doing very well.”
The budget also includes more money for everything from K-12 education and $500 million of tax cuts, primarily property tax and income tax relief.
While other states struggle with deficits and falling revenue, North Dakota has maintained its bright financial position, in part thanks to the largest oil boom in its history. Oil production taxes are expected to generate $682 million over the next biennium, Peterson said.
Counties and towns in the state’s oil patch near the Bakken oil field, the largest field in the U.S., have spent the last few years lobbying the state for more money to deal with the booming industry’s impact on everything from roads to schools.
The budget sets aside $600 million to build and repair state highways across the state and an additional $228.5 million for state highway projects within the 17 oil- and gas-producing counties in western North Dakota. Another $142 million is appropriated for repair projects on county and township roads in the oil-producing region of the state.
The budget also includes $100 million of grant money to help oil-patch governments “offset direct impacts created by the rapidly developing energy industry,” according to the governor’s office.
Governments can use the money to finance everything from the construction of city streets to sewer and water lines, public safety services, and rapid growth in school enrollment.
The final budget spends $600 million more than proposed by Republican Gov. Jack Dalrymple. The additional spending means reserves are expected to total $1.056 billion compared to Dalrymple’s proposed $1.2 billion by the end of 2013.
Lawmakers appropriated that additional money for transportation infrastructure projects. “They also added some dollars into some disaster spending, since we’re flooding again from one end of the state to the other,” Peterson said. “We certainly agree with those funding levels.”
North Dakota is rated AA-plus by Standard & Poor’s and Aa1 by Moody’s Investors Service.