Say Anything Blog

Last session Governor John Hoeven presented a budget to the North Dakota legislature that included a spending increase of $382,000,000 for state agencies over and above the spending increases those agencies requested.  The Governor’s increases, combined with the increases demanded by the agencies themselves, totaled a whopping $580,000,000.

Not all of these increases made it through the legislature, but by the end of the session the taxpayers still saw a 24% increase in general fund spending with only a paltry property tax rebate scheme in terms of tax relief.

Now, with tax revenues in the state continuing to soar, Governor Hoeven seems prepared to once again propose massive increases in government spending based on those increased revenues.

North Dakota agencies may use their existing budgets as a starting point for drafting new spending plans for the next two years.

Gov. John Hoeven has presented budget-writing guidelines to state agency directors. In some years, state departments have been required to suggest cuts in current spending.

Hoeven’s instructions this year say agencies should look for budget efficiencies. But they don’t require state administrators to identify cuts.

What Hoeven is doing, essentially, is giving every bureaucrat in the state a blank check.  But the question North Dakotans should be asking is: Can we afford those blank checks?

Sure, tax revenues in the state are high, but will those revenues remain high if we keep expanding the size and expense of government?  And what happens if the resurgent oil industry falters in the state as it has before?  We will be committed to massive increases in spending on state agencies (which is not, I would remind you, one-time spending) with dwindling tax revenues with which to pay for it.

Governor Hoeven gets a lot of credit for the economic success North Dakota has experienced over the last several years, and while we can debate whether or not he deserves that credit (I think it’s more owing to the resurgent oil industry and, more recently, high crop prices than anything Hoeven’s done), if he keeps opposing tax relief for North Dakotans and keeps increasing state spending we aren’t going to remain economically prosperous for long.

We may be able to increase spending for a few more sessions, and keep taxation high to support that spending, but doing so is just building a house of cards that will eventually collapse.