2007-2009 Budget Guidelines Address
Governor John Hoeven
March 20, 2006
Good morning. Thank you all for joining us today.
It seems like only yesterday that we stood here planning for the current biennium. Yet here we are again, looking to the future. Today, we establish guidelines for the 2007-2009 biennium budget. Our responsibility, as always, is to demonstrate to the people of North Dakota that we are good stewards of their money, and that we will do all we can to provide them with quality services.
Let me begin by complimenting all of you on how well you have met that responsibility in the past, and I ask that you continue to fulfill that trust in the next budget cycle. Our state employees do an outstanding job for the citizens of North Dakota, and I thank you for your hard work, diligence, and dedication.
As we approach the midpoint of the current biennium, North Dakota can be proud that we have experienced healthy economic growth. We are doing new things in new ways, and we are seeing the results. Over the past year alone, we have added more than 7,000 jobs and 400 new businesses. We have increased wages and income faster than both the nation and the region. Retail sales have broken new records, our state revenues are growing, and our gross state product now totals almost $23 billion a year.
We are seeing not only more growth, but more diversity in our economy. We have managed to build our state and its finances for two reasons: first, because we have diversified our economy and made the right investments to help it grow, and second, because of our good management of the taxpayers' money.
Today, I am calling on you to develop a 100 percent budget for the 2007-2009 biennium. That means that we must continue to find efficiencies and better ways of doing things. Over the next few months, I challenge you to look carefully at your expenditures, identify inefficiencies, prioritize your programs, and find savings wherever possible. These are the criteria on which you need to base your budget decisions.
If you are looking at new programs, you need to weigh them against existing programs. If you have initiatives or programs that will help better serve the citizens of North Dakota, you can submit them for consideration as optional requests, in order of priority, beyond your 100 percent baseline.
As you know, some spending increases are automatic, and consequently you need to take this into account. Others, however, are discretionary, and those are the ones that you need to look at carefully and prioritize. All programs should be results-driven. We should strengthen our best programs, and consolidate programs or seek other efficiencies when possible.
The major grant programs in the Department of Public Instruction, such as Foundation Aid and special education will not be subject to the100 percent budget guideline. For planning purposes, Higher Education should build its budget based on an increase similar to that passed in the last legislative session, along with funding to continue the compensation increase efforts.
Although we will enter the new biennium in a strong economic position, we must recognize with clear vision that we have real challenges in the growing cost of our state's responsibilities. We must recognize that as our revenues have grown, so have our expenses. We are committed to taking care of our neediest, protecting our most vulnerable, and investing in our children and our future. That means that we must budget our resources with the greatest of care.
Declining support for key federal programs like Medicaid, along with increasing healthcare costs, will put larger burdens on our budget over the next few years. Also, our state employees - all of you - serve the citizens of North Dakota with dedication and skill, and you deserve a salary increase in the upcoming biennium. We will build that increase, as well as the cost of health insurance, into our next budget.
Further, we owe a tremendous debt to our citizen-soldiers, and we will make sure that we continue to say “thank you” in meaningful ways, like tuition credits and special bonuses for our National Guard, regardless of where they live.
As our soldiers protect the nation abroad, we are also committed to protecting the public safety here at home by adequately funding corrections and facilities for the civilly committed at the state hospital. The civil commitment of sexual and violent offenders is increasingly expensive, but we cannot put a price tag on the safety of our families and especially our children. We must do all we can to ensure that no child is at risk from a dangerous criminal who should be in prison or in a secure unit at the state hospital.
We will continue to increase funding for education. Over the last several bienniums, we have increased funding for K-12 education by $120 million and fostered new partnerships to address declining school enrollment and teacher compensation. Now, the newly formed Governor's Commission on Education Improvement is working to further improve teacher compensation and help reduce the burden on property taxes. To help them in that endeavor, we will commit at least $60 million in new funding for school equity and adequacy.
The local funding needs of our cities and counties continue to grow. Since 2001, we have increased state assistance to schools, cities, and counties by almost $200 million, from $877 million to over $1.072 billion. To help take the pressure off property taxes, we will build on that effort.
At the same time, as we consider our expenses, we need to distinguish between spending and investment. It is essential that we continue to make the kinds of investments that have enabled us to expand our economy and grow our revenues - investments like Centers of Excellence, our biofuels initiatives, and other programs that are revitalizing, diversifying, and growing our economic base. These are fueling the economic engine that is creating jobs, businesses, and more revenues, for the State of North Dakota - while enabling us to continue to hold the line on taxes.
These guidelines mark just the beginning of a thoughtful and constructive process. The decisions we make today will affect our state tomorrow. We have an obligation to the people of North Dakota to balance their budget, to provide quality services, and to make the kinds of investments in our future that will improve the standard of living for all. With sound judgment and proper care, we can continue to grow our state and improve the quality of life for our citizens. We must all be committed to that task.
Thank you once again for the fine job you do for the people of North Dakota. You care about your work, and it shows in the job you do. Thank you.
