CHICAGO -- North Dakota lawmakers Friday continued to debate a new two-year budget against an early Saturday morning deadline, marking the first time in state history that the Legislature remained in session until the last day of its 80-day meeting, held once every two years.

On Thursday, legislators approved a high-profile measure that will send a record $1.1 billion of revenue to the oil-producing region of the state, which is struggling with boom-related needs ranging from infrastructure to education.

The appropriation is triple the amount appropriated in the current budget. The new spending plan also includes a 20% individual income-tax rate reduction. Lawmakers are expected to spend nearly all of a $1 billion surplus in the current budget on one-time items.

For the fourth biennium in a row, the budget includes no borrowing.

Lawmakers Friday continued to debate final spending bills, including a $1.8 billion K-12 measure that includes property tax cuts.
“We’re in uncharted territory,” Joe Morrissette, assistant executive budget analyst for the Office of Management and Budget, saying that Gov. Jack Dalrymple will be forced to call a special session if lawmakers can’t wrap up debate by the morning of May 4. “There’s more money in this budget than any other budget we’ve had,” Morrissette said. “We started with a surplus of over $1 billion, and there was so much money to fight over it made it hard to make decisions,” he said.

North Dakota is in the midst of the largest oil boom in its history, thanks to Bakken Formation, the largest oil field in the country. The U.S. Geological Survey recently doubled its estimate for how much oil can be recovered under the state.

Local officials from the oil-producing counties and cities have lobbied lawmakers for years for more money to help handle the stress of the boom-driven population growth.

House Bill 1358 passed both chambers Thursday. It appropriates $1.1 billion to oil-producing counties by changing how revenue from the oil and gas production taxes is allocated. The bulk of the money goes to the 17 oil-producing counties, then cities, with the three hub cities, including Williston, getting most of the money. The remainder goes to schools and townships.

The local governments will mostly be able to spend the money as they like, and most will likely pump it into road repair, Morrissette said. “There’s a huge need for road funding, because these rigs are moving all the time and they’re tearing up roads originally designed 60 or 70 years ago for agricultural traffic,” he said.

Oil and gas tax revenue is expected to bring in nearly $4 billion in the current two-year biennium and $5.2 billion in the upcoming biennium, through 2015.

“I thank you for being sensitive to the needs out west where this boom has brought a mixed blessing,” Sen. John Andrist, R-Crosby, was quoted as telling lawmakers on the Senate floor after the bill was approved. “There are only a few people in a boom that do really well. There are all kinds of people who get left behind.”

The 2013-2015 general fund budget is expected to total around $7 billion, with an all-funds budget around $14 billion. A legacy account funded with oil and gas revenue is expected to reach $1.2 billion by June 30, 2013.

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