North Dakota Shouldn't Be Using A Boom-Era Budget As Baseline For A Post-Boom Budget
N.D. Gov. Jack Dalrymple speaks Thursday at the summit on economic growth that his office helped to host in downtown Fargo. Dave Olson/The Forum
Yesterday Governor Jack Dalrymple set budget guidelines for state agencies asking them to come in at 10 percent less than their budgets for the current 2015-2017 biennium.
Though really what Dalrymple is ordering is a 5.96 percent reduction. State agencies are already reducing their budgets from what was appropriated by 4.04 percent to comply with Dalrymple’s ordered allotments from February.
Anyway, what’s frustrating is that by ordering percentage reductions from the existing spending levels at state agencies Dalrymple is essentially using the last budget, created when North Dakota had very different expectations for revenues, to create new budgets.
That seems like a bad way of going about business.
[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]…what’s frustrating is that by ordering percentage reductions from the existing spending levels at state agencies Dalrymple is essentially using the last budget, created when North Dakota had very different expectations for revenues, to create new budgets.[/mks_pullquote]
To illustrate the point, consider how former Governor Ed Schafer is handling the budget crunch at the University of North Dakota where he is serving as interim president. Schafer isn’t looking to reduce budgets. He is systematically reforming the ways in which the university spends its money. He is evaluating what programs and budget items UND will need to prioritize going forward, and what can be jettisoned.
Superficially there doesn’t seem to be much of a distinction between the two choices, but the difference is enormous. Rather than looking to reduce spending to hit a fairly arbitrary percentage reduction, Schafer is looking at it from the other direction. What spending does UND really need to do in order to fulfill its mission?
This approach is more than likely why Schafer can take Dalrymple’s calls for more spending reductions in stride. “For me, because of the work we’ve been chewing on here at the university, I think we’re well down the road to be able to handle the governor’s new guidelines in a manner that’s acceptable and workable for the university,” he told the Grand Forks Herald.
I wish Dalrymple was taking a similar approach.
Now that the Bakken oil boom has come and gone the state shouldn’t just be looking to reduce budgets. The state should be looking at reforming spending so that it is in line with the state’s needs in the post-oil boom “new normal.” State spending exploded during the oil boom:
Some of this was a reaction to actual needs created by the oil boom (more cops, road improvements, larger schools, etc.), but some of it was the result of lawmakers lacking the gumption to say no to spending requests when the state’s coffers were flush.
Which is all the more reason why we need Schafer-style reform, not Dalrymple-style percentage reductions. Post oil boom we need to re-evaluate every dime of spending.
A better sort of leader than Dalrymple would get that process started now, because when the Legislature goes into session starting in January they only have 80 days to work.
