BISMARCK, N.D. (AP) - Newly elected Republican Gov. Doug Burgum is scheduled to get his first paycheck Tuesday, the same day the Legislature returns to face depressed crop and crude oil prices that have sent the state’s once enviable economy sliding.
But the wealthy businessman-turned-politician has promised to forgo a salary as an example of the cuts needed to gain control of what he has called runaway state spending.
“Everything is on the table,” the blue jean-clad Burgum said in an interview Thursday while sitting atop an exercise ball in his Capitol office.
The Republican-led Legislature begins its session at noon Tuesday, expected to last at least until late April.
It should be far different than the last two sessions when the Legislature - flush with bounty from the state’s once booming oil patch - spent record amounts of money. But the prolonged weakening of oil and agriculture prices has lawmakers facing a sobering dose of austerity.
“We can’t spend money we don’t have,” said House Majority Leader Al Carlson, R-Fargo. “It is going to be all about funding our priorities and there is not going to be a lot of new initiatives because there is not the revenue for it.”
State spending rose more than $8 billion in the past decade as oil money flowed in and the same boom put massive demands on roads, schools, public works and housing.
Though less money is expected in the state treasury for the 2017 session, lawmakers say there will be a shortage of ideas on how to spend it, especially on education and human services.
Burgum took office in mid-December, just days after former GOP Gov. Jack Dalrymple presented a $13.4 billion spending plan that includes trimming state employee positions and cutting higher education funding to shore up the state’s budget and grow its reserves as tax collections shrink.
Burgum, who is crafting a budget plan of his own, has promised to work with legislators to downsize spending without raising taxes but has offered few details, even to lawmakers.
Carlson said legislative leaders “have no idea” of the new governor’s budget plan, though they too know cuts are needed.
“If he wants to downsize, I’ll be the first one to back him,” Carlson said.
Rep. Corey Mock, D-Grand Forks, the House minority leader, said there is no debate about the state’s declining tax revenues but cuts should not come from “knee-jerk” decisions that are “politically convenient.”
“We need to avoid the temptation of just saying ’no’ for the sake of saying ’no,’” Mock said. “It’s simply too complex of a problem to do that. We need to take a strategic look at our investments.”
Burgum said he won’t go into detail about his spending plan during his State of the State address Tuesday. He expects to unveil it sometime later in January.
“Our intention is to be lower than Dalrymple’s budget,” Burgum said.
The former governor’s spending plan is about $2 billion less than what he proposed two years ago. That figure eventually was reduced to $14.2 billion for the current budget cycle as Dalrymple ordered massive cuts to state agencies and a raid on state savings to make up for a more than $1.4 billion shortfall in tax collections.
Dalrymple did not run for re-election.
Even with the drop in tax revenue, North Dakota still has a sizable financial cushion. The state will have about $5.1 billion in surplus cash in various reserve accounts when the next fiscal year begins on June 30, a pot that’s forecast to grow to $6.3 billion over the next 2½ years, according to state budget director Pam Sharp.
Burgum and Carlson both believe the former governor’s plan relies on overly optimistic revenue projections the next two years.
Carlson said lawmakers, while awaiting Burgum’s budget, intend to work from revenue assumptions of their own based on oil prices lower than the $60 benchmark in Dalrymple’s proposal.
North Dakota’s general fund can take in no more than $300 million in oil tax revenues per two-year budget cycle, and the remainder goes to an assortment of reserve funds. But the general fund also is financed by income and sales taxes, which also are greatly affected by oil prices.
Burgum built Great Plains Software in Fargo from a startup, which was later sold to Microsoft for $1.1 billion in stock. He has not disclosed his net worth, but will earn about $130,000 annually as governor. His promise to forgo his state salary is being reviewed to see if it can be done under state law.
“Ideally, I’d like to do that,” Burgum said. “If I can’t get that figured out, I’ll donate it to charity.”
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