News from the 65th Legislative Session

•“New normal” makes revenue forecasts harder

Lawmakers got the bad news last week: Revenues are $46 million short of the amount they’d expected for the rest of the biennium. For the next two-year budget cycle, revenues are $103 million short.

The news wasn’t as bad as feared, however.

Jacobs

By MIKE JACOBS
NDNA

•“New normal” makes revenue forecasts harder

Lawmakers got the bad news last week: Revenues are $46 million short of the amount they’d expected for the rest of the biennium. For the next two-year budget cycle, revenues are $103 million short.

The news wasn’t as bad as feared, however.

“Oh! God no,” Senate Appropriations Committee Chair Ray Holmberg said.

“This is doable.”

“About what we expected,” his House counterpart, Rep. Jeff Delzer, said.

Perhaps the most pessimistic view came from Gov. Doug Burgum, who donned suit and tie to present the budget findings to legislators. His message was that legislators should revisit his budget recommendations.

Specifically, he said legislators should require state employees to share the cost of health insurance so they’d “have skin in the game.” He wants state employees to pay 5 percent of the premiums.

He suggested lawmakers might find a way to give employees a pay raise of 1 percent in the second year of the coming biennium if revenues proved stronger than expected.

The health insurance premium idea would save the state about $11 million. A 1 percent increase in pay would cost $12 million.

Neither is likely despite Burgum’s urging.

The state has historically paid 100 percent of employee health care premiums even in the very lean years of the 1980s, when a previous oil boom collapsed.

Legislators themselves are state employees, and they are eligible for the state health insurance plan.

Retaining the health care premium at 100 percent probably precludes a pay raise.

Assumptions that went into the forecast might be more important in the long run than the numbers that came out. “There’s a changed relationship between what’s going on in the economy and the sales tax,” Dan White, director of fiscal policy research for Moody’s Analytics told legislators.

This echoed Tax Commissioner Ryan Rauschenberger’s talk at Energy Day, also held last week at the capitol. Tax revenues have entered a “new normal,” he said, because sales tax collections are no longer linked so closely to economic activity. That’s because so much of sales tax revenue comes from business-to-business sales – like those in the oil field – rather than from retail sales. What’s more, increasing efficiencies in drilling are driving down oil field purchases and reducing sales tax revenues.

White said. “North Dakota runs on a very different cycle than the rest of the United States.”

“We can’t handicap the relationship. It’s darn near impossible,” White said. The change in the relationship between oil activity and sales tax revenue “has accelerated in the last few months.”

Sales tax revenue goes into the state’s general fund, and that fund supports about half of state government spending, including the cost of public schools, higher education and human services.

Forecasts for other tax revenues were generally more positive.

Oil taxes should bring in $2.9 billion this biennium, an increase of $12.7 million from the January forecast. In the next biennium, oil tax revenue should reach $3.15 billion, an increase of $92.5 million.

Virtually all of the oil tax revenue goes into special funds.

Members of the House and Senate appropriations committees will vote this week on whether to adopt the new forecast as the basis for budget building.

•Guns in the crosshairs at the capitol

This could be gun week in the state capitol. The Senate Judiciary Committee will consider seven bills expanding guns rights.

Two of these are especially significant.

One of these, HB1169, would establish what its supporters call “constitutional carry.”  The bill provides that anyone “who is not otherwise precluded” may carry a firearm if the individual has “a valid drivers’ license or non-driver identification card issued by the Department of Transportation.”

The bill also recognizes and accepts conceal-and-carry permits issued by other states.

The House passed the bill 83-9.

Another bill attracting attention would create a “first armed responder pilot program” in schools.

The state superintendent of public instruction would “adopt rules and develop criteria” for carrying guns in schools. The first 10 proposals from “public or non-public schools” would be accepted.

The House approved the bill 73-9. The bill number is HB 1310.

Several bills allow certain people to carry firearms at public gatherings. One names retired law enforcement officers; another includes individuals designated by the governor, the chief justice of the state Supreme Court, the speaker of the state House of Representatives or the president pro temp of the state Senate.

Another bill allows people living in houses provided by government to carry guns with the approval of the supervising agency. This would include the governor, university presidents and potentially teachers or custodians, park rangers and others living in housing provided by public bodies.

Yet another allows state employees to carry concealed weapons “on property owned or leased by the state.”

Still another removes the requirement that churches inform law enforcement authorities of persons approved to carry firearms. The bill also provides that churches can’t be held liable for “any injury, death or damage caused by an individual permitted to carry a dangerous weapon concealed.”

The Senate committee will recommend whether the bills be passed. If the Senate passes the bills, they will go to Gov. Doug Burgum for consideration.

•Session could end by Easter

It appears more and more likely that the North Dakota Legislature will wrap up by mid-April.

Legislative leaders have asked committees to finish their work by March 27.

That would leave two weeks to pass bills and to reconcile differences between House and Senate versions through conference committees.

Adjournment before Easter is often a goal for North Dakota legislators. Ending the session on Good Friday, which is April 13, would leave lawmakers at least 10 days to use if issues arose requiring their attention. One such issue on the horizon is the federal health care law, known as the Affordable Care Act or Obamacare. Changes in the law could require adjustments in state law.

The state constitution limits the legislature to 80-days in a two-year period. The 80th day this year would be near the end of April, though the exact date depends on the calendar going forward.

If lawmakers were to take a day off – unlikely but not impossible – the mandatory adjournment date would be later.

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