North Dakotans have a number of suggestions for handling the state's ample budget surplus, including tax cuts and cash incentives for some of the state's small colleges to take up a different mission, former Gov. Ed Schafer says.

"We have a lot of money available, and it would be great if we could make one-time expenditures that would invest in the state of North Dakota, that would move our economy forward, that could make government more efficient and less costly," Schafer said.

The former Republican governor took part in a number of October public forums hosted by Americans for Prosperity, a Washington, D.C.-based group that advocates lower taxes and restrictions on government spending, to discuss ways to use the burgeoning surplus.

On Monday, Schafer and Duane Sand, the organization's state director, held news conferences in Bismarck and Fargo to discuss the comments collected at the forums, which Sand said were attended by 233 people.

Suggestions included cutting North Dakota's individual income tax rates, abolishing the state's corporate income tax, paying off state debt, and providing incentives for telecommunications companies to offer improved wireless telephone and high-speed data networks.

Forum participants suggested improving the state's pipeline and electrical transmission networks, which are used to export North Dakota's energy production, and offering some of North Dakota's small public colleges large grants to leave the state's university system and convert to another use.

"You could turn over the facilities to a business," Schafer said. "Maybe you could go out and give (a business) the dollars to move to your community."

Schafer and Sand said the proposals have been presented to state lawmakers and Gov. John Hoeven for review. They said they hoped the ideas will be considered in the 2007 Legislature, which begins Jan. 3.

"The good (budget) ideas don't come from … the halls of the Capitol," Schafer said. "When I was there, they came from the streets in North Dakota."

Schafer served as governor from 1992 to 2000, when Hoeven succeeded him. He has declined subsequent entreaties to run for the U.S. Senate. Sand has been a Republican candidate for the U.S. Senate and House.

Hoeven said Monday that he was given the proposals a few days ago, and had not had time to review them in detail.

His legislative budget recommendations for the Legislature include a plan for offering property tax discounts to homeowners, farmers and ranchers, and businesses, and the governor said he believed property tax reductions should precede any attempts to cut state tax rates.

"The first thing we need to do is provide help with property tax relief," Hoeven said. "If we continue to build this economy like we are, hold the line on taxes, that bigger base will put us in position over time to reduce the rates."

When North Dakota's current budget period ends June 30, budget forecasters predict state government's budget surplus will approach $540 million.

Hoeven, in his budget recommendations to the Legislature last week, asked lawmakers to approve a general fund spending plan of $2.47 billion for the 2007-09 budget cycle, an increase of 24 percent over two years.

Even with that increase, the governor said, tax collections should be strong enough to leave a cushion of almost $413 million.

Public debate about the size of North Dakota's university system - it has six four-year schools and five two-year colleges - has quieted since voters, in November 1998, defeated a proposal to remove references to eight of the 11 colleges from the state constitution.

Opponents of the amendment said it could clear the way for the Legislature or the Board of Higher Education to close some of North Dakota's smaller colleges.

Schafer said North Dakota's per capita expenditures for its higher education system are among the nation's highest, but college officials say it's not enough.

"Those factors really mean that unless something structurally changes, we're never going to be able to put the kind of money in that our system demands," Schafer said.