'Back to the basics,' using Legacy Fund earnings highlighted in Burgum's budget
North Dakota Gov. Doug Burgum said his budget goes "back to the basics" because it focuses on strengthening the state's financial position, building up reserves and "living within our means" without raising property taxes.
In a Wednesday afternoon meeting with Herald editorial staff, the Republican detailed his proposal for a $14.3 billion budget for the 2019-20 biennium, the largest in state history. The budget that he presented Wednesday morning to the state Legislature, which would have to approve it in the 2019 legislative session, includes $4.6 billion in general fund spending.
"We've gone from having wind in our face to having some wind in our sails again," Burgum said.
The governor spoke of reinvesting in state employees with an increase of $180 million from the 2017-19 biennium. That includes $112 million in salaries, $59 million for health benefits and $9 million for retirement.
Payments per student for K-12 education also would increase 2 percent each year—from $9,646 to $9,839 for the 2019-20 school year and $10,036 for the 2020-21. Burgum also proposed paying schools sooner.
On the current system, schools receive funding each year based on student enrollment from the previous year. Burgum's proposal would pay schools the December of the school year, based on the certified fall enrollment.
"One of the largest employers in most of our communities is the public school system," he said.
It would cost the state a one-time payment of $30 million to $40 million to shift money. It would help schools with growing enrollments.
The two moves were praised by state Superintendent Kirsten Baesler.
"The per-student payment has remained the same for the last three years, while costs have been rising," she said in a statement. "Our present system disadvantages schools that are growing. It makes it more difficult for them to educate their students and meet their obligations."
Burgum highlighted his proposal to use $300 million in earnings from the Legacy Fund for what he called "the first class of Legacy projects." The state would focus on projects that would have regional, state or national impacts, that would reach past one generation of North Dakotans and could be leveraged for investments, he said.
For example, the infrastructure revolving loan fund, the largest investment from the Legacy Fund, would use $55 million and is expected to have a return of $370 million, the most out of the nine proposed Legacy projects, Burgum said. The announcement of developing a statewide network for unmanned aircraft already has generated interest from the UAS industry, he said of the UAS project that would use $30 million from the Legacy Fund.
Burgum acknowledged other states are attempting to develop autonomous technology on the ground, while North Dakota is focusing on aerial developments. Grand Forks is home to Grand Sky, the first business park in the U.S. dedicated to UAS development.
The Legacy Fund was created in 2010 and had a principal balance of nearly $5.2 million and earnings of almost $286 million as of Oct. 31, according to the State Treasurer's Office. Lawmakers don't want to use any money from the principal, but there is an appetite in the Legislature for using Legacy Fund earnings for various projects, Burgum said.
"Our best place where we can build competitive advantage is to keep investing in the area where we have a lead and then trying to maintain that lead," he said.