News Releases for December 2004
December 8, 2004
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Hoeven Delivers 2005-2007 Budget Address
Focus On Good Fiscal Management, Economic Growth, Taking Care Of People
Comparison of 2003-2005 Legislative Appropriation and 2005-2007 Agency Budget Request and Executive Recommendation 
(72 kb pdf)
Recommended General Fund Appropriations by Function for the 2005-07 Biennium (48 kb pdf)
Recommended Total Fund Appropriations by Function for the 2005-2007 Biennium (48 kb pdf)
Executive Revenue Forecast (48 kb pdf)
BISMARCK, N.D. - Gov. John Hoeven today released his 2005-2007 executive budget, which stresses three key priorities for the future: good fiscal management, a growing economy and caring for people.
“Our budget is sound, and includes reserves of more than $60 million,” Hoeven said. “Our budget invests in the future of our state to continue the growth of our economy and expand opportunities for our citizens. Our budget provides for the basic needs of our people - and our budget includes no tax increases.”
Good Fiscal Management
“As good stewards of the taxpayers money, we have looked carefully at our revenues and our expenditures to make sure we are spending within our means, and that we have healthy reserves going forward,” Hoeven said.
As a result of aggressive economic development efforts and good fiscal management, North Dakota has additional revenues of about $127 million this biennium and is projected to gain another $82 million over current levels in the next biennium.
“Good fiscal discipline means creating a sound rainy day fund,” Hoeven said. “To that end, we have established a reserve fund totaling just over $60 million.”
The reserve fund called for in the budget includes a $10 million ending fund balance, $41 million in the Oil Trust Fund and another $10 million in reserve at the Bank of North Dakota.
“In addition, we propose to further strengthen the Bank of North Dakota by raising its statutory floor from $140 million to $150 million,” Hoeven said.
Evidence of North Dakota’s sound fiscal approach was recently provided by Moody’s Rating Service. Moody’s, which rates states’ creditworthiness nationwide, just raised North Dakota’s credit rating from Aa3 to Aa2.
Growing the State’s Economy
“Just as we must maintain a sound fiscal position for North Dakota, we must also invest in the future of our state,” according to Hoeven.
The executive budget advances a number of initiatives to stimulate the economy and continue to create jobs and raise wages and income:
- A $37.5 million increased investment over the biennium in education, including dollars earmarked for teacher compensation, $2.5 million more for supplemental payments, $2 million for Joint Powers Agreements, and $5.7 million for technology.
- A $28.8 million increased investment in higher education, in accordance with the Higher Education Roundtable recommendation to fund the system at a level equal to 21 percent of recurring revenues.
- A commitment to Centers of Excellence as a new program of the Bank of North Dakota, which will empower the state’s universities to not only build their academic excellence but also help power growth in North Dakota’s economy.
- A plan for economic development accountability to measure and evaluate the success of our projects, and provide the public with information about tax dollars are being spent.
- An initiative to establish a North Dakota Transmission Authority to promote the expansion of lignite and wind energy industries.
- Ongoing support for value-added ag, biofuels, wind and other sources of renewable energy.
- A $1 million initiative to expand the North Dakota Trade Office to promote foreign commerce, in partnership with businesses throughout North Dakota.
“All of these measures are designed to continue our aggressive economic development efforts and enhance our business climate,” Hoeven said.
Taking Care of People
“As we take a portion of these revenues to reinvest in our state, we must also dedicate a portion to honor one of our most important obligations - taking care of our people who need and deserve our support,” Hoeven said.
Due to rising healthcare costs and a growing prison population, many of these expenses are non-discretionary, unless the state is willing to cut existing services.
Hoeven’s budget includes:
- $32 million state appropriations to replace FMAP funding from the federal government for Medicaid.
- $15 million more in state appropriations to manage the state’s larger and growing prison population.
- $10.9 million in appropriations to fund deficiencies for prior emergencies and disaster payments.
- $16 million in increased funding for the legislative and judicial branches, as required by law.
In addition, the budget includes strong support for other vital services:
- For veterans and their families, $5 million to provide a bonus payment for combat service, and additional tuition assistance for National Guard members.
- Expansion of the Homestead Tax Credit to provide property tax relief for seniors and people with disabilities.
- Increased funding for nursing homes and home and community based care.
- Additional funding for civil commitment of sex offenders, drug treatment and crime prevention.
- A pay increase for state employees.
- Additional revenue sharing for cities and counties to help reduce the pressure on property taxes.
“I look forward to working with the Legislature to invest in the people of North Dakota - their ingenuity, their energy and their outstanding work ethic,” Hoeven said. “Working together, we can build a brighter future for North Dakota.”
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