Surprise: Disappearing Stimulus Money Leading To Big Spending Hikes For North Dakota

President Barack Obama answers a reporter's question about his tax compromise as he meets with President Bronislaw Komorowski of Poland in the Oval Office of the White House in Washington on December 8, 2010.  UPI/Dennis Brack/POOL Photo via Newscom

Back in March of 2009 I wrote a letter to the Grand Forks Herald in which I said that North Dakota’s acceptance of stimulus money would result in inflated state budgets that would then have to be paid for by North Dakota taxpayers once the federal funds dried up. I posted about the letter on the blog, saying “all the stimulus money is going to inflate state budgets that are likely going to have to be maintained by North Dakota taxpayers once the ‘stimulus’ money is gone.”

At the time several political leaders in the state told me I was wrong. That the stimulus money was all “one time” and that it wouldn’t result in state spending hikes. But according to Governor Jack Dalrymple’s budget address yesterday (full text here), a big chunk of his budget’s increase in general fund spending is the result of disappearing “stimulus” spending.

This is a direct quote from the governor’s speech:

In total, General Fund expenditures increase by $334 million over the current biennium; however, more than half of this increase is made necessary by having to replace $174 million in decreased federal funding in Human Services alone.

Of that $174 million reduction in federal funds, $105 million is due to a formula change caused by our state’s significant increase in per capita personal income, and $69 million is due to the additional expense caused by the discontinuation of federal stimulus funding in the upcoming biennium. Excluding the $174 million in discontinued federal funding, our increase in General Fund expenditures would be 2.7 percent per year.

The stimulus money, funded by our federal tax dollars, came into the state and inflated state budgets by creating new programs and new spending. Now that the stimulus money is drying up, we’re expected to pony up our state tax dollars to keep the spending and programs in place.

In other words, the predictions made by conservatives such as myself came true.

By the way, anyone else finding the justification for the other $105 million in increased state spending to replace disappearing federal funding to be a little odd? Dalrymple is saying that our state has become more prosperous, therefore we qualify for less federal funding for social programs. Therefore, he wants to increase state spending on those social programs.

But if we’ve become more prosperous…why in the world do we need those social programs?


Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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