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Legislative Session #63

Legislative Session #63

May 4, 2013 at 1:55 pm



 Gov. Jack Dalrymple says the North Dakota's 63rd Legislative Assembly was highlighted by the passage of historic tax relief; landmark reforms in the way North Dakota funds education, unprecedented funding for statewide infrastructure improvements; conservation enhancements and meaningful support for public safety and quality-of-life enhancements.



"Our strong economy allows us to provide even more tax relief while investing in important priorities for growth," Dalrymple said. "This is a time of incredible progress in North Dakota and we have a great responsibility to continue making meaningful investments while maintaining healthy reserves so that we can sustain our progress for generations to come."


STATEWIDE INFRASTRUCTURE IMPROVEMENTS
Leading into the 2011 legislative session, Dalrymple initiated the most ambitious infrastructure improvement program in state history. The 2013 Legislature worked with Dalrymple to continue the program by once again providing record investments in highway improvements, county and township road upgrades, water supply systems, flood protection projects and many other infrastructure enhancements throughout the state. These statewide investments are critical because our highways and other infrastructure support North Dakota's continued economic growth and quality of life.

Highways, Roads and Other Transportation Improvements
The Legislature appropriated about $2.3 billion to rebuild and repair state highways, county and township roads, bypass routes and other infrastructure upgrades in every region of the state. The funding includes:

* About $1.64 billion for highway improvement projects throughout the state.
* $617 million to repair and rebuild county and township roads.
* Statewide grants of $15.5 million for airports.



Addressing Rapid-Growth Impacts

The Legislature has appropriated about $2.5 billion, unprecedented funding to continue addressing the needs that come with rapid growth in North Dakota's oil-producing region. The state's oil counties will receive record funding through an increase in their share of state oil and gas taxes, significant transportation funding and funding from various state agency budgets. Funding to help the state's oil-producing counties manage rapid growth includes:

* About $590 million in oil and gas gross production tax allocations, an increase of more than 140 percent from the estimated allocation of $246 million in the current biennium. The funding includes:

o $314 million to counties

o $198 million to cities

o $47 million to school districts

o $31 million to townships

* More than $1.5 billion for highway improvement projects as well as county, township and city road improvements.

* $10 million from the Strategic Investment and Improvements Fund (SIIF) for critical-access hospitals.

* $10 million in SIIF funding for law enforcement grants and projects.

* $240 million from the state's Oil and Gas Impact Grant Fund to target areas of greatest need in western North Dakota. This represents an increase of $140 million over the current biennium. The grant program includes:

o $14 million for the hub cities of Williston, Minot and Dickinson

o $60 million for grants to airport authorities

o $5 million for counties impacted by oil and gas development

o $4 million for higher education grants

o $3.5 million for fire protection districts

o $7 million for emergency medical services

o $25 million for schools

o $135.5 million in undesignated funding for competitive grants to address the region's most critical needs in schools and other political subdivisions



Flood Control and Water Supply Projects

The Legislature appropriated $515 million from the Resources Trust Fund for permanent flood control projects and water supply projects that will serve communities throughout the state. The funding package includes:

* $40 million for the Western Area Water Supply (WAWS) project as part of the Williston Water Treatment Plant expansion and an additional $79 million to expand fresh water supply into rural areas and communities of western North Dakota. During the 2011 and 2013 legislative sessions, the state has provided nearly $230 million for WAWS development.

* $79 million for the Southwest Water Pipeline project in western North Dakota. The funding will provide for the construction of transmission lines in Dunn and Oliver counties; to upgrade Dickinson's water treatment plant and to extend rural water supplies.

* $96 million to expand water supply service in areas across the state, including: $14 million for the Northwest Area Water Supply; $11 million for the Red River Valley Water Supply as well as several rural water supply expansions, treatment plant upgrades and other water supply improvements.

* $33 million for general water management projects throughout the state, including dam safety, repairs and construction and Devils Lake downstream mitigation.

* $61 million toward permanent flood protection in Minot, including planning, design, engineering and home acquisitions.

* $100 million toward permanent flood protection in Fargo and surrounding areas.

* $21 million for flood control projects in Valley City, Lisbon and Fort Ransom, including property acquisitions as well as flood walls and levees.

* $10 million for operation of the Devils Lake flood control outlets.

LANDMARK TAX RELIEF
Dalrymple has signed into law unprecedented tax relief totaling about $975 million during the 2013-2015 biennium. The Legislature followed Dalrymple's recommendation to provide historic property tax relief by reforming the way North Dakota funds K-12 education.

Since 2009, Dalrymple has worked with legislators to reduce taxes by about nearly $2.4 billion. The 2013-2015 tax relief package is made up of:

* More than $850 million in property tax relief, including $656 million provided through a new K-12 school funding formula that shifts the largest share of education costs from school districts to the state. $200 million in property tax will be provided through a state-paid tax credit.
* $200 million in individual income tax relief across all tax brackets. Combined with tax relief provided since 2009, North Dakotans will realize a 42 percent reduction in their income tax.
* $50 million in corporate income tax relief.
* Dalrymple recommended and the Legislature approved a significant expansion of the state's homestead tax credit to make more North Dakotans eligible for this property tax reduction. The Legislature raised the maximum income limit and the maximum asset limit, including the value of taxpayers' homes. Tax relief provided through this program to senior citizens who live on fixed incomes more than doubles from $8.8 million to $20 million.
* Dalrymple also signed into law an expansion of the homestead tax credit for disabled veterans. The change will expand the tax credit program for disabled veterans from $4.2 million to $7.7 million, an 83 percent increase.


K-12 EDUCATION
Following Dalrymple's recommendation, the Legislature approved the most significant reform in K-12 funding in state history. The Legislature approved the governor's proposal to establish a new, integrated formula to deliver both property tax relief and strong funding for schools so that all students receive the educational resources they need to succeed.

The Legislature approved $1.7 billion to fund schools and reduce the local cost for school funding. The appropriation represents an increase of $477 million compared to 2011-2013 funding. The new funding formula is sustainable and will result in most school districts needing to levy no more than about 70 mills to cover the local share of school funding. For the average school district, this represents about a 45 percent reduction in local property tax rates.

The Legislature also approved the governor's recommendation to provide grants to school districts challenged by rapidly growing enrollments. The Legislature provided $13.6 million for school districts that experienced enrollment growth of four percent or more during the previous year. Additionally, the Legislature approved the governor's proposal to increase school transportation funding by more than 10 percent, from $48.5 million to $53.5 million, to help districts meet the rising costs of providing student transportation services.

HIGHER EDUCATION
The Legislature also supported Dalrymple's recommendation to fund North Dakota's colleges and universities under a new funding model. Rather than funding campuses based on initial student enrollments, the Legislature agreed that North Dakota's 11 campuses should receive funding based on student credit hours completed. The new funding formula is more transparent and is based on the actual costs of education.

With the new funding formula in place, the Legislature appropriated $902.3 million to fund the state's colleges and universities.

Jarrod Thomas

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