Candidates for North Dakota governor's race anticipate tougher fiscal times
Whomever is elected North Dakota's next governor will likely encounter a much different economic landscape than his or her predecessor. State general fund appropriations more than doubled from the 2009-11 biennium to the 2013-15 biennium, but tum...
Whomever is elected North Dakota's next governor will likely encounter a much different economic landscape than his or her predecessor.
State general fund appropriations more than doubled from the 2009-11 biennium to the 2013-15 biennium, but tumbling oil and agriculture commodity prices are forcing Gov. Jack Dalrymple's potential successors to face a more challenging fiscal future. Dalrymple ordered a 4.05 percent budget cut to most state agencies last week in an effort to meet a $1.07 billion shortfall.
While all three Republican gubernatorial candidates-Rick Becker, Doug Burgum and Wayne Stenehjem-said the state needs to look for savings and are opposed to tax increases, they raised somewhat differing ideas about how the next governor should handle the state's fiscal situation.
Meanwhile, Dalrymple will submit an executive budget for the coming two-year cycle before leaving office, his spokesman Jeff Zent said.
No Democrats or Libertarians have officially announced plans to run for governor.
Stenehjem, who has served as North Dakota's attorney general for the past 15 years, said the allotment process underway will help inform state leaders about agencies' priorities. His own office has to trim $2.2 million in order to meet Dalrymple's order, he said.
Stenehjem predicted the next budget will ask state agencies to submit initial budgets assuming a portion-he floated 95 percent as an example-of their previous funding levels. He added a good chunk of recent spending were one-time expenditures that won't have to be repeated.
Beyond that, there are areas "big and small" where the state needs to look at doing things differently, Stenehjem said.
"And I think most importantly, something I think that will get a lot of attention is how we address the unsustainable growth in the populations in the prisons, and that means we need to rethink things in dramatically different ways, addressing both chemical addiction and mental illness," he said. "Because we're incarcerating too many people who don't get the services they need and result in increased recidivism."
Stenehjem said he has that goal in mind "not just for the savings but because it's the right thing to do."
Meanwhile, Becker, a state representative from Bismarck, suggested continuing Dalrymple's allotment "at the very minimum," or bumping it up to save additional dollars as well as cutting one-time spending and looking for inefficiencies.
"Our state government has grown so much over these last six, eight years," he said. "There is definitely room for downsizing."
Becker said "every budget should be on the table," and pushed back on any notion that education and health and human services should be left untouched.
"There can be cuts in all sorts of areas that won't actually affect or directly affect the recipients that we're worried about," he said, adding there's "significant redundancy" in higher education and "a lot of top-end administrators that are making some good salaries" in health and human services.
While both of Becker's opponents agree the state needs to examine every corner of its budget, Stenehjem said North Dakota needs to continue to fund its priorities of education and public safety.
Burgum, a Fargo entrepreneur and former Microsoft executive, said the race is "not about who promises the biggest cuts."
"We have to be open-minded about our processes," he said. "We have to figure out how to do more with less."
'Unhinging' the economy
Stenehjem also said the state should continue efforts to diversify the economy, pointing to the emerging unmanned aerial systems industry in Grand Forks and plans to use natural gas for fertilizer and plastics plants.
"The governor, chief among all the agencies, is the prime example of somebody who can assist a business that wants to come to North Dakota," he said, adding the governor can also help ensure businesses will face a "stable tax climate and a predictable regulatory system."
Burgum echoed a similar sentiment in an opinion piece sent to news outlets this week that cited North Dakota's 40th ranking on the Bloomberg U.S. Innovation Index. He said the state should not "wait for the economic storm to pass" and instead must "build a diversified economy and create a more streamlined state government."
"We need to unhinge our economy-and our state tax revenue and spending structure-from forces beyond our control," he added. "Improving our innovation stature is essential to successfully navigating the economy of the future."
While Becker agreed diversification is a "fantastic concept," he said government should not pick "winners and losers" through tax incentives and subsidies.
"If we put ourselves in a position of a very good tax climate, we would then open the doors to any kind of business, all businesses, and therefore a diversified mix of businesses to want to come here," he said.