Jan 07, 2009 - 04:05:23 CST
Gov. John Hoeven told lawmakers gathered in the House chamber Tuesday that North Dakota's economy is strong, but not immune to the global economic turmoil that has strained state budgets throughout the nation."When I say the state of our state is strong, however, I am mindful of the fact that as many as 41 other states are facing budget deficits this year or next," Hoeven said in his state of the state address that marks the beginning of the 61st Legislature. "Clearly, our nation's economy is in a down cycle, and we in North Dakota are not immune from its effects."
Despite the threat of an economic downturn, Hoeven said the state must continue to build its reserves, estimated to be about $1.2 billion, and make investments in things like infrastructure and education.
"This is a time to make well-placed investments in our economy, investments that will stimulate further growth," Hoeven said, adding that the state's oil trust fund should grow from about $600 million to at least $800 million in the next two years under his budget.
Lawmakers generally said they supported the governor's proposed $7.7 billion budget while voicing caution about the extensiveness of some of his proposals in light of a struggling economy.
"He has three strong points that most legislators will agree with: No. 1 is to fund your priorities, No. 2 is to make sure you have a strong reserve, and the third one is to return money to the taxpayers," House leader Rep. Al Carlson, R-Fargo, said. "Will the end product look exactly like Gov. Hoeven's budget? Probably not. But do we like his message, you bet."
Hoeven continued to push for his tax-cutting proposals that he introduced during his recent campaign for governor, including a $100 million income tax cut and $300 million property tax relief package that also adds $130 million in education funding.
"Think about it: meaningful property tax relief can make the difference between whether a family decides to live and work in Fargo, North Dakota, or in Moorhead, Minnesota," he said.
The governor's $300 million property tax relief plan would reduce school mill levies on a dollar-for-dollar amount. He said the income tax cut would ensure "all North Dakota taxpayers benefit from our plan."
Hoeven also pushed for the $130 million to fund the Commission on Education Improvement's recommendations, potentially increasing the state's share of education funding to 70 percent.
"In 1983, you, the Legislature, set a goal for North Dakota to fund 70 percent of the cost of public education," Hoeven said. "Today, that goal is not just within our sights -it's within our grasp."
He also continued to push for a $170 million one-time investment into the state's universities for building and campus maintenanc e. Included in that proposal is $40 million for tuition assistance under the ACT-ND program.
The governor began his speech by honoring veterans from every war since World War II, asking them to stand to applause in the chamber.
He also outlined some of the state's economic strides since 2000, noting that North Dakotans' personal income has grown by 43 percent since 2000, nearly 15 percent faster than the national average. Hoeven added that per capita income in North Dakota ranks 26th in the nation, up from 38th.
Hoeven said the state's gross budget has grown from $17.7 billion in 2000 to more than $27 billion last year. Hoeven said foreign exports from North Dakota also have grown by 225 percent since 2000, generating more than $2 billion.
Other proposals Hoeven outlined in his speech include raising the minimum eligibility requirement to enroll in the State Children Health Insurance Program from 150 percent of the poverty level to 200 percent of the poverty level, which would mean a family of four making $42,400 each year would qualify.
Hoeven also pushed for a resource center that would provide information about long-term care service such as assisted living. The governor also wants to see Medicaid reimbursement rates increase.
He touted the state's investments into its energy sector, highlighting Basin Electric's Dakota Gasification plant, which is the country's only coal gasification plant. He also said by partnering wind farms with coal gasification plants, "we can justify the major expense of building new transmission lines that cost hundreds of millions of dollars."
Hoeven also continued to push for a $120 million one-time investment into the state's roads, bridges and water supply systems.
Hoeven's proposed $7.7 billion budget for the next two years, which provides for $2.7 billion general fund spending, is a total spending increase of 19 percent.
(Reach reporter Brian Duggan 223-8482 or brian.duggan@;bismarcktribune.com.)
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