BISMARCK -- North Dakota's budget surplus -- a projected billion-plus dollars -- should not be a green light to spend, spend and spend some more. Rather, it should be cause to be smart, to have learned a lesson from the free spending that prompted the present recession and to not commit to ongoing expenditures that cannot be sustained.
The projected surplus has reached $1.3 billion; $453.9 million would be in the general fund and $622.9 million in surplus oil tax collection (by June 30, 2009).
The short list of items that the surplus should be used for include: Property tax relief, infrastructure improvements (roads, bridges and government buildings), education and energy transmission and pipeline issues.
There's good reason for caution. Much of the surplus comes from recent oil prices, which are well beyond expectations. These are prices that may or may not hold. (The surplus projections are based on $98 a barrel until July 1, and then nearly $85 a barrel through June 30, 2010.)
In addition, there could be several ballot measures that may affect future state spending, including a proposal to reduce individual income tax rates by 50 percent, reduce corporate income tax rates by 15 percent and establish a permanent trust fund for oil tax collections that would restrict spending the principal.
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While proposals to reduce income tax rates are interesting, a bigger need is for property tax relief. The property tax bills that homeowners will get in December, funding local schools, parks, cities and counties, will have real bite. Gov. John Hoeven and the Legislature combined to provide property tax relief in the 2007 session. And there's a near consensus, rightfully, that some kind of property-tax relief will be crafted for the upcoming session.
After that, lawmakers should look at improvements in infrastructure. These should fit in the category of one-time expenditures so as to not build an ongoing burden on the state budget. These would be road and bridge projects, as well as some of the deferred maintenance on the campuses of the state's colleges and universities.
Getting North Dakota's other surplus, its energy surplus, to market also should concern lawmakers. This is not to suggest the state fund pipeline or transmission lines, but that the state have the resources available to assist in making that happen. The return and reward for such an effort by the state would be substantial for all North Dakotans, not just energy companies.
Finally, the state needs to continue to strengthen elementary and high school education and ensure access to the state's higher education system by moderating tuition costs.
There's no doubt that the governor and lawmakers will feel tremendous pressure to spend the surplus on a nearly endless list of needs. That was the way of it in the 2007 session when a smaller surplus -- if you can think of $540 million as small -- generated a high number of requests. It will be the same in January 2009.
To spend or not to spend? If you have to ask, don't spend.
