Hoeven: Put $352 million Under the Matress

2005-2007 Budget Address

In the 2007-2009 biennium, our ongoing revenues and transfers will total about $2.29 billion. At the same time, our ongoing expenditures will total about $2.28 billion, meaning that even with our conservative projections, ongoing revenues exceed our ongoing expenditures.

We do more to fund our priorities, like education, strong law enforcement, and taking care of our seniors, while still living within our means.

Also, as shown next in Chart 2, our growing revenues are reflected in a $312.0 million ending fund balance for the current biennium. In a nutshell, this is our general fund surplus, or the amount of cash we have above our current level of reserves.

This general fund surplus is largely the result of higher revenues from sales and income taxes, which have been generated by North Dakota’s growing and more diversified economy, as well as prudent fiscal management.

This general fund surplus when combined with $228.0 million in current reserve funds (the budget stabilization fund and oil tax trust fund) provides a total of $540.0 million in surplus and reserves.

Our budget takes a portion of these resources – $188.0 million – and invests them in one-time capital needs, like economic development, technology systems, equipment, capital projects, extraordinary repairs, and deferred maintenance.

These are the kinds of investments that will further stimulate economic activity, build infrastructure, help lower costs for the future, make our state more competitive, and improve our standard of living.

That still leaves more than $352.0 million we will dedicate to our reserves and cash balances going forward.

It’s great that we have a surplus and not a deficit, but the question must be asked – what do is just sitting on this money? How does “hiding it under the matress” do anyone any good?

A reserve fund is great, even better would be to

1.) Create long term trust funds for funding education at all levels.
2.) Create incentives to promote the further utilization of energy sources here in North Dakota. Specificly expanding oil refinery capacity so that all that oil in the western part of the state can be used.
3.) Cut taxes. North Dakota still ranks 31st by The Tax Foundation.

I would contend that the worst option is to just sit on this money. Use it to create long term economic strength, or give it back in the form of lower taxes for everyone.

Given the above, this really is a stupid statement:

In our recommendation, higher education comes closer to its requested budget than ever before.

$352 million in extra money and it “comes closer than ever before?”

It’s this attitude that has caused the massive tuition (read: tax) increase on students. Just fund the damn thing already.

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