North Dakota state budget

From Ballotpedia
Jump to: navigation, search

North Dakota state budget

Flag of North Dakota.png
Budget calendar:  Biennial
Current fiscal year:  2015
State credit rating:  AAA (as of 2014)
Current governor:  Jack Dalrymple
Financial figures
GF expenses[1]:  $2.220 billion (estimated for FY 2013)
All funds expenses:  $5.939 billion (estimated for FY 2013)
Spending % change:  Decrease.svg1.46%[2]
% from federal funding:  20.49%
State debt:  $9,263,742,000
Per capita state debt:  $13,241
Other state budgets
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming
Policypedia Budget Policy-logo-no background.png

Between fiscal year 2009 and fiscal year 2013, North Dakota's total expenditures increased by approximately $1.998 billion, from $3.941 billion in 2009 to $5.939 billion in 2013. This represents a 50.70 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

This page contains information about budget processes and policy issues in North Dakota, including:

  • a summary of the budget drafting process
  • trends in expenditures and revenues
  • current and past fiscal year budget developments
  • financial transparency measures

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in March and/or April of the year preceding the start of the new biennium.
  2. State agencies submit their budget requests to the governor in June and/or July.
  3. Agency hearings are held from July through October.
  4. The governor submits his or her proposed budget to the state legislature in the first week of December.
  5. The legislature typically adopts a budget in April. A simple majority is required to pass a budget. The new biennium begins in July.

North Dakota is one of 44 states in which the governor has line item veto authority.[6]

The governor is legally required to submit a balanced budget proposal. Likewise, the state legislature is legally required to pass a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
North Dakota $2,220 $1,621 $2,072 $26 $5,939 $8,209.92
Minnesota $20,056 $8,637 $6,263 $810 $35,766 $6,598.43
Montana $1,947 $2,115 $1,978 $0 $6,040 $5,949.77
South Dakota $1,302 $1,487 $1,307 $35 $4,131 $4,889.47
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in North Dakota can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
North Dakota 13.8% 17.7% 0.1% 12.1% 1.9% 16.4% 38.0%
Minnesota 23.8% 9.7% 1.4% 27.6% 1.5% 8.3% 27.7%
Montana 15.5% 9.8% 0.5% 16.8% 3.1% 12.7% 41.5%
South Dakota 14.3% 17.7% 0.8% 20.9% 2.7% 15.9% 27.7%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, higher education spending in North Dakota fell by nearly six percentage points, or 24.7 percent, as a share of the budget. During the same period, transportation expenditures rose by 4.40 percentage points, or 36.7 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 13.8% 17.7% 0.1% 12.1% 1.9% 16.4% 38.0%
2011 15.8% 20.6% 0.1% 14.3% 1.8% 12.4% 35.0%
2010 16.6% 20.7% 0.2% 13.7% 1.8% 11.3% 35.8%
2009 14.0% 22.7% 0.3% 14.1% 2.0% 11.7% 25.4%
2008 14.5% 23.5% 0.3% 15.1% 2.0% 12.0% 32.6%
Change in % -0.70% -5.80% -0.20% -3.00% -0.10% 4.40% 5.40%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
North Dakota $1,256 $596 $162 $5 $528 $2,547 $3,520.91
Minnesota $4,817 $8,649 $1,165 $39 $2,786 $17,456 $3,220.44
Montana $62 $1,048 $177 $57 $734 $2,078 $2,046.96
South Dakota $776 $0 $0 $1 $587 $1,364 $1,614.44
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, North Dakota ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $1,256 $596 $162 $5 $528 $2,547 $3,520.91
2012 $1,154 $430 $199 $6 $731 $2,520 $3,593.10
2011 $782 $428 $147 $8 $342 $1,707 $2,492.45
2010 $610 $302 $88 $8 $529 $1,536 $2,277.77
2009 $622 $375 $99 $10 $248 $1,354 $2,093.24
Change in % 101.93% 58.93% 63.64% -50.00% 112.90% 88.11% 68.20%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

Fiscal years 2014 and 2015

DocumentIcon.jpg See budget bill: Legislative Appropriations 2013-15 Biennium (overview document)

North Dakota does not pass a single, all-encompassing appropriation bill, but rather several appropriation bills that together comprise the biennial budget. For a detailed overview of the 2013-2015 biennial budget, click here.[14][15]

Fiscal years 2012 and 2013

See also: North Dakota state budget (2011-2013)

Fiscal year 2011

See also: North Dakota state budget (2010-2011)

Fiscal year 2010

See also: North Dakota state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in North Dakota ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $2,222 36.9% $1,910 31.7% $1,884 31.3% $11 0.2% $6,027
2010-2011 $1,615 32.2% $1,568 31.3% $1,813 36.1% $21 0.4% $5,017
2009-2010 $1,595 32.8% $1,394 28.6% $1,857 38.2% $20 0.4% $4,866
Averages: $1,810.67 34% $1,624 31% $1,851.33 35% $17.333 0% $5,303.33
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, North Dakota had a state debt of over $9 billion. Its state debt per capita was $13,241. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in North Dakota[18]
Type Totals U.S. rank
Total state debt $9,263,742,000 48
Per capita debt $13,241 30
State and other fund expenditures $4,132,000,000 46

Public pensions

See also: North Dakota public pensions and North Dakota public employee salaries

A 2012 report from the Pew Center on the States noted that North Dakota's pension system was funded at 72 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[19]

Taken together, the funding ratio for the state's pension systems decreased from 85.68 percent in fiscal year 2007 to 63.46 percent in fiscal year 2012, a decrease of 22.22 percentage points, or 25.9 percent. Likewise, unfunded liabilities increased from under $1 billion in fiscal year 2007 to more than $2 billion in fiscal year 2012.[20][21]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This is turn results in lower interest costs, thereby lowering the cost to taxpayers.[22][23]

The table below lists the Standard and Poor's credit ratings for North Dakota and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[24]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
North Dakota AAA AAA AA+ AA+ AA+ AA+ AA AA AA AA AA-
Minnesota AA+ AA+ AA+ AAA AAA AAA AAA AAA AAA AAA AAA
Montana AA AA AA AA AA AA AA AA- AA- AA- AA-
South Dakota AA+ AA+ AA+ AA+ AA AA AA AA AA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014.

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[25]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[25]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
North Dakota 20.49% $1,750,134,000 49
Minnesota 28.13% $9,608,018,000 39
Montana 38.46% $2,202,444,000 6
South Dakota 40.85% $1,630,220,000 4

Stimulus

North Dakota received $1.10 billion in federal stimulus funding between February 2009 and June 2013.[26]

Budget transparency

Transparency evaluation
OMB Transparency
Searchability N
600px-Red x.png
Grants N
600px-Red x.png
Contracts N
600px-Red x.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries P
Partial.png
Last evaluation date unknown.
See also: Evaluation of North Dakota state website and Constitutional provisions regarding reading of bills

Legislation was passed in May 2009 (Senate Bill 2018) that mandated the creation of a statewide spending database. The database was set to be completed by June 30, 2011.[27]

The table to the right is helpful in evaluating the level of transparency provided by the state's spending website.

Independent transparency sites

The North Dakota Policy Council sponsors a website on school transparency.[28]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for North Dakota, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[29][30]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. North Dakota tied for 33rd in the nation with 12 other states, earning four out of eight possible points.[30]

North Dakota - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting N
600px-Red x.png
Annual cycle N
600px-Red x.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Nonpartisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations N
600px-Red x.png
TOTAL 4

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[30]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[31] According to the report, North Dakota received a grade of D and a numerical score of 56, indicating that North Dakota was "lagging" in terms of transparency regarding state spending.[31]

Accounting principles

See also: North Dakota government accounting principles

The North Dakota Office of the State Auditor (OSA) is divided into three operational divisions:[32]

  1. Division of State Audit
  2. Division of Local Government Audit
  3. Division of Royalty Audit

The OSA publishes its audit reports online. The Auditor is a constitutionally elected state official.[33]

Contact information

North Dakota Office of Management and Budget
600 East Blvd. Avenue, Department 110
Bismarck, North Dakota 58505
Telephone: 701-328-2680

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. North Dakota Legislative Council, "North Dakota's Budgeting Process," December 7, 2012
  15. State of North Dakota, "Legislative Appropriations 2013-15 Biennium," accessed April 28, 2014
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. Pew Center on the States, "Widening Gap Update: North Dakota," June 18, 2012
  20. North Dakota Public Employees Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 14, 2013
  21. North Dakota Retirement and Investment Office, "2012 Comprehensive Annual Financial Report," accessed November 14, 2013
  22. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  23. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  24. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  25. 25.0 25.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  26. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  27. North Dakota Policy Council, "State to post expenditures online," May 10, 2009
  28. Sunshine on Schools, "Home page," accessed April 28, 2014
  29. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  30. 30.0 30.1 30.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  31. 31.0 31.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  32. North Dakota Office of the State Auditor, "Home page," accessed November 4, 2009
  33. North Dakota Office of the State Auditor, "Audit Reports," accessed November 4, 2009