Burgum: Revised revenue forecast continues to predict growth; supports tax relief, investing in priorities
The state Office of Management and Budget (OMB) released a revised revenue forecast on Tuesday that continues to predict growth into the next biennium, keeping the state in a strong position to provide tax relief and invest in priority areas, Gov. Doug Burgum said.
“Today’s revenue outlook continues to predict significant growth from this biennium to the next in all major revenue categories, including sales tax and income taxes, which speaks to our state’s robust economy,” Burgum said. “This supports our ability to provide permanent income tax relief and invest significantly in workforce, child care, infrastructure and other priorities to better serve North Dakotans and make our state more attractive when competing with other states for capital and talent.”
Overall, general fund revenues are running nearly 25%, or $832 million, ahead of the revised November 2021 legislative forecast for the current 2021-23 biennium that ends June 30. In February alone, general fund revenues were nearly 43%, or $47 million, ahead of forecast – a “very strong month,” OMB Director Joe Morrissette said.
The revised forecast released Tuesday projects revenues for the current biennium at $27 million below the November 2022 executive forecast that was used to craft Burgum’s executive budget proposal, but $16 million above the January 2023 estimate adopted by lawmakers as they began the current legislative session. Similarly, today’s forecast projects 2023-25 revenues at $59 million below the November executive forecast but $39 million above the January legislative forecast. Inflation and labor constraints were among the factors cited for the slight decrease from the November executive forecast.
“We’re still projecting significant growth for the next biennium, it’s just a bit smaller than what we shared with you in November,” Morrissette told House and Senate appropriators.
The revised forecast is based on the latest economic data and tax collection figures and broad “boots on the ground” input from industry representatives who serve on the state’s Advisory Council on Revenue Forecasting.
Morrissette added that three of the state’s four major tax types – sales tax, motor vehicle tax and corporate income tax – have exceeded forecast for seven or more consecutive months.
Oil production is expected to remain constant at 1.1 million barrels per day throughout the next biennium. Oil prices have decreased slightly since the executive revenue forecast was being developed in November 2022, from around $80 per barrel to the current price of around $75 per barrel. Oil and gas taxes account for approximately half of all state revenue.
For the current 2021-23 biennium, oil revenues are expected to total just over $6 billion, which is $2.3 billion higher than the estimate used in the original 2021 legislative budget and $9 million higher than expected in November. For the 2023-25 biennium, oil tax revenues are expected to remain fairly constant, with a slight decline in the second half of the biennium, and are expected to total $5.14 billion in revenues, about $116 million lower than expected in the November estimate.
Burgum signs bill allowing for alcohol tax revenue sharing agreements with tribal nations
Gov. Burgum has signed legislation allowing tribal nations to enter into agreements with the State of North Dakota to share revenue from alcohol taxes on tribal lands, resolving a longstanding issue.
Under Senate Bill 2377, each of the five tribal nations in North Dakota will have the opportunity to enter into an agreement with the state to impose a single tax on alcoholic beverages sold at the retail and wholesale levels within their respective reservations. Tribal nations that adopt the alcohol tax will keep 80% of the tax revenue, while the state’s general fund will receive 20%.
The Governor’s Office has worked with tribal nations, legislators and the Office of the State Tax Commissioner for several years to negotiate an acceptable framework for revenue sharing agreements and avoid a situation in which both the state and tribe could levy separate alcohol taxes on reservations.
Senate Bill 2377 arose from more recent discussions led by Sen. Dale Patten of Watford City, the Mandan, Hidatsa and Arikara (MHA) Nation including Chairman Mark Fox, Tax Commissioner Brian Kroshus, the North Dakota Indian Affairs Commission, and legislative co-sponsors Sen. Jordan Kannianen of Stanley and Rep. Craig Headland of Montpelier, who chair the Senate and House tax committees, respectively.
“This bill creates a fair and uniform framework for taxing alcohol on reservations while ensuring that the bulk of the revenue goes to the tribes to support addiction treatment and other programs,” Burgum said. “We are grateful for the collaboration with Chairman Fox, Tax Commissioner Kroshus, Sens. Patten and Kannianen, Rep. Headland, and everyone else who worked to bring this across the finish line. This is another example of why tribal engagement is one of our five strategic initiatives, because by building relationships based on understanding and mutual respect, we can address longstanding challenges and reach solutions that benefit all North Dakota citizens.”
“This bill provides a fair mechanism to share taxes generated from the sale and consumption of alcohol on the reservation,” Fox said. “The tribal share collected under SB 2377 will help develop and provide resources for addiction treatment, law enforcement, community safety, and wellness programs.”
“This legislation will provide an opportunity for MHA and other tribal nations to enter into a revenue share agreement, further strengthening state and tribal relations and creating another avenue of needed funding to help support social programs for our tribal partners,” Kroshus said.
“This agreement is a very positive step that has been in the works for many years, and I’m pleased that we now have a resolution supported by all involved,” Patten said.
The bill was approved unanimously in both the House and Senate. It improves upon an alcohol tax revenue sharing bill that passed in 2019 but hadn’t been utilized.
The legislation builds upon previous state-tribal tax agreements signed by Burgum in recent years. A compact signed with MHA in 2019 and ratified by the Legislature changed how the state and tribe share tax revenue from new oil and gas activity on trust and fee lands. Legislation signed in 2021 provided a framework for the state and MHA to share tax revenue from oil wells that straddle the boundary of the Fort Berthold Reservation, while another bill in 2021 authorized the governor to enter state-tribal agreements for sales, use and gross receipts taxes.
The signing of SB 2377 on Tuesday brought the total number of bills signed this session to 108.
Department of Financial Institutions Commissioner Lise Kruse says ND banks, credit unions remain stable
North Dakota’s state-chartered banks and credit unions remain stable, well-capitalized and in sound financial condition, Department of Financial Institutions Commissioner Lise Kruse said last week.
“Community financial institutions have a relationship-based business model. With local leadership and a commitment to their customers and communities they serve, these institutions are well-equipped to continue providing financial services to North Dakota citizens. This is in direct contrast to the business model of the recently collapsed banks,” Kruse said in the wake of the failures of California-based Silicon Valley Bank and New York-based Signature Bank.
Depositors are protected by the full faith and credit of the United States through the Federal Deposit Insurance Corp. (FDIC), Kruse explained. Founded in 1933, the FDIC has provided stability to North Dakota’s banking system and assurance to citizens.
“This is why your money is safest in the bank,” Kruse said. “Money at home can be stolen or lost due to a fire. However, money in a bank is locked and secure, and your deposits are insured up to $250,000 per depositor.”
To see if your money is insured, check out the FDIC’s insurance calculator at https://edie.fdic.gov/. Likewise, credit union deposits are insured by the National Credit Union Administration (NCUA). No insured depositor has lost money in the history of the FDIC or the NCUA, Kruse noted.
Since 1887 the Department of Financial Institutions has regulated North Dakota’s financial institutions, which today include state-chartered banks and credit unions, trust companies and non-depository financial institutions.
“Our department remains committed to ensuring a safe and sound financial system for the citizens of North Dakota,” Kruse said.
Applications being accepted for Governor’s Band/Orchestra Program and Choral Program
Gov. Burgum is encouraging school, community and church bands, orchestras and choirs across North Dakota to apply to serve as the Governor’s Official State Band/Orchestra Program and Choral Program for the 2023-2024 school year.
The Governor and First Lady will select the Governor’s Band/Orchestra Program and Governor’s Choral Program from the applications received based on musical talent, achievement and community involvement. The band/orchestra and chorus may be invited by the governor to perform at official state functions held throughout the year, including the State of the State Address.
Interested groups should submit an application, references and a musical recording to the Office of the Governor by 5 p.m. Monday, April 17. The Governor’s Band/Orchestra Program and Governor’s Choral Program will be announced in late April and may be invited to perform at the Capitol in May 2023 and at events throughout the 2023-2024 school year. Please complete the application and provide materials at https://www.governor.nd.gov/governors-chorus-and-bandorchestra-program-application.
