CHICAGO - As most states struggle with falling revenues, North Dakota is enjoying a large budget surplus that would allow for double-digit spending increases over the next two years even as the state considers slashing its income tax rate in half.

Thanks largely to recent record-high oil prices, North Dakota expects a $1.2 billion budget surplus by the end of its 2007-2009 biennium in July 2009. The state's 2007-2009 all-funds budget was $6.4 billion, and its general fund budget totaled $2.5 billion.

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