After a slew of spending proposals added $369 million to Gov. John Hoeven's budget during the first half of the legislative session, the state budget has begun coming back down to earth.

As of last week's latest budget analysis, the Legislature is only $34 million above Hoeven's budget.

The major changes include the exclusion of a competing property tax reduction plan, which added $100 million to the budget, as well as the restoration of transfers from the Bank of North Dakota to the state general fund.

The transfers generated $60 million for the upcoming biennium and $30 million for this biennium. More than $70 million was returned to the budget when the state Senate axed a House proposal to build a new state prison, but negotiations on this matter are ongoing.

A number of smaller spending proposals - such as a free college tuition program for state high school students, more money to repair roads in the oil patch, and an elimination of the home heating fuel tax - have been cut or reduced.

"We're getting down to the process where bills are eliminated, especially bills that do the same thing," said Senate Majority Leader Bob Stenehjem, R-Bismarck.

House Appropriations Committee Chairman Ken Svedjan, R-Grand Forks, said reductions in the increases promised to many state departments also have made a difference. Svedjan said his committee has been analyzing every budget in search of efficiencies.

He gave as an example the removal of hospital bed units that weren't being used from the Department of Human Services Budget.

"We have tried to focus on what is really necessary," Svedjan said. "The overriding philosophy is that we have to balance the budget, and we all know that."

Stenehjem agreed, noting that Republicans' goal is to stick to the priorities they laid out at the beginning of the session. Those goals include leaving money for savings, increasing K-12 education funding and offering tax relief, he said.

"We have the responsibility to balance the budget, and we have to prioritize spending," Stenehjem said.

Earlier in the session when the Legislature was far above the governor's recommended budget, Democrats harshly criticized the body's Republican leaders, saying they had mismanaged the budget.

House Minority Leader Merle Boucher, D-Rolette, said a lot of progress has been made since then.

"We are getting closer to being back on track," he said.

Boucher attributed the difference to a reversal of a trend where major revenue reductions in the form of tax cuts accompanied many large spending increases.

Leaders on both sides of the aisle agree that the final budget will resemble Hoeven's executive budget recommendation.

Back in January, the governor called for $2.47 billion in general revenue spending in his executive budget recommendation. Eyeing a $540 million budget surplus, his ideas included a renovation of the state penitentiary, a 4 percent raise for state workers, a substantial increase in K-12 education funding and a large property tax rebate program.

The governor's executive budget is officially just a recommendation to the Legislature, which has the authority of putting together the state budget. Still, it often carries weight with legislators as they assemble the budget.

Despite the progress that's been made toward a balanced budget, two of the biggest battles on the biggest spending bills are yet to be resolved. The final incarnations of an $82.5 million school funding increase and a $116 million tax cut bill likely won't be known until the final days of session.

Svedjan said he expected much of the budget to be balanced in conference committees, the groups of legislators appointed to settle differences in bills passed by the House and Senate.

Because the session started with so many large spending proposals, more of the work of a creating a final budget has been pushed to the end of the session, he said.

"There's still a lot of work to be done," Svedjan said.

(Reach reporter Jonathan Rivoli at 223-8482 or jonathan.rivoli@bismarcktribune.com.)