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Dalrymple: North Dakota at incredible moment in history

From: The North Dakota Office of the Governor

BISMARCK, N.D. - Governor Jack Dalrymple said today in his State of the State Address that North Dakota's unparalleled economic growth and sound fiscal management have created great opportunities to provide permanent tax relief and to invest in statewide infrastructure improvements, quality-of-life enhancements and other priorities.

"Today, we as a people, are at an incredible moment in our state's history and we are ready to write the next great chapter," Dalrymple said. "The great economic progress we have made has given us an opportunity that is rarely available to any state, and that is the opportunity to create our own future."

North Dakota must continue its successful approach to economic development and at the same time, enhance its commitments to meeting the challenges that come with strong growth. The state's robust economy and strong financial position pave the way for greater tax relief, major investments in statewide priorities and healthy reserves, he said.

"I believe many people have been watching our national budget crisis with great concern and naturally, they are worried that the same situation could develop at the state level," Dalrymple said. "It has not and will not happen in North Dakota because we are committed to a structural balance in our state budget, where ongoing spending for established programs never exceeds the ongoing revenues available for spending."

Statewide Infrastructure Investments
Economic growth cannot be sustained without strong investments in infrastructures and the state has an opportunity to address infrastructure needs in every region of the state. In his address, Dalrymple called for an unprecedented $2.7 billion in state funding for state highways, county road systems, township roads, bridges and other infrastructure improvements in western North Dakota and throughout the state.

Dalrymple also encouraged legislators to change the state's oil and gas production tax formula to provide oil-producing counties with a larger income stream. Giving oil counties a greater share of the tax revenue will support needed enhancements for local law enforcement, other services and to better address the local impacts from rapid oil development.

Additionally, the state remains committed to flood recovery, flood prevention and water supply projects. The state should invest $515 million in available funding from the Resources Trust Fund to assist local communities in moving forward with flood prevention projects and water supply projects, Dalrymple said.

"The state built in record time a second water outlet from East Devils Lake which contributed greatly to lowering the lake three feet this year," Dalrymple said. "The Fargo area, as well as Valley City and Lisbon, have made good progress acquiring homes and building flood protection for their cities. But the job of flood recovery is not done. We must stand by Ward County and the City of Minot as they move forward with plans for permanent flood protection."

Investing in Education
K-12 Education
Dalrymple said North Dakota has a great opportunity during the 2013-2015 Legislative Session to build on the state's accomplishments in reforming the way we fund K-12 education. By fully integrating property tax relief with school funding, the average school district mill levy will total about 60 mills. The proposed funding change will result in taxpayers saving about $800 million per biennium.

"Perhaps the best feature of this integrated formula is that it ends the excessive dependence on local property tax which has become a heavy burden on our people," Dalrymple said.

Higher Education
North Dakota should also make critical investments in the state's higher education system and help make post-secondary education more affordable. Dalrymple encouraged members of the Legislative Assembly to adopt a new funding model for distributing state funds to North Dakota's 11 campuses. The new model would fund campuses based on the courses that students complete, rather than initial class enrollments.

"Because the proposed formula is based on the actual cost of education, because it is more easily understood and because it is more transparent, we recommend funding higher education based on this improved funding method," Dalrymple said. "It will increase the credibility of our system and lead to better support from everyone."

Dalrymple also encouraged the Legislature to increase the state's merit-based and needs-based scholarship programs and the investment of about $150 million in capital projects that include an expansion of the University of North Dakota School of Medicine and Health Sciences and a new building dedicated to the fields of science, technology, engineering and math (STEM) at North Dakota State University.

Quality of Life Enhancements
Public Safety
During the 2011-2013 biennium, the state stationed an additional 13 Highway Patrol troopers in western North Dakota. But more must be done to support the county sheriffs, police chiefs and state's attorneys in rapid-growth areas. Dalrymple has recommended hiring an additional 15 troopers and supports enhancements for the state Attorney General's Office, the court system and parole and probation programs. The governor also proposes to change the oil and gas production tax formula so that oil-producing counties receive a greater share of the revenues.

Additionally, Dalrymple encouraged legislators to support funding to enhance the enforcement of state health and environmental rules.

"As a state we must continue to meet these challenges head-on," Dalrymple said. "Dealing with them effectively and efficiently must be an integral part of our vision for the future of North Dakota."

Greater Housing Development
Since 2010, builders have completed or begun construction on about 16,500 housing units throughout the state. Despite the building surge, more housing, and particularly low-income housing, is needed to meet the needs of North Dakota's growing communities, Dalrymple said.

To facilitate greater development of affordable housing, Dalrymple encouraged the Legislature to increase the state's Housing Incentive Fund to $50 million. Citizens and businesses that invest in the fund receive a state income tax break of equal value. Taxpayers have fully capitalized the current Housing Incentive Fund by investing $15 million which is expected to result in the development of 739 housing units at a total value of $104 million. Developers access this source of low-interest loans in exchange for providing housing for low- and moderate-income residents.

Dalrymple also encouraged the Legislature to provide an additional $12 million in Flex PACE buydown funds to support residential construction. This investment, available through the Bank of North Dakota, would generate an estimated $125 million in mainstream housing development.

The governor recognized Lutheran Social Services of North Dakota for being the clear leader in coordinating low-income housing projects that utilize the state's Housing Incentive Fund and other affordable housing programs.

Preserving North Dakota's Great Outdoors
The outdoor experience and the tradition of hunting in North Dakota are also core elements in our quality of life. Dalrymple said the state should commit a portion of funds generated by oil production taxes to a newly created conservation fund, with an annual funding cap of $10 million. A committee made up of a diverse group of stakeholders would administer a grant program under the direction of the North Dakota Industrial Commission. The committee will award grants to state agencies and non-profit groups to benefit statewide conservation practices, wildlife habitat, parks and outdoor recreation.

2020 & Beyond
Research ND
A year ago, Dalrymple and the North Dakota Chamber of Commerce set out on a state visioning process called 2020 & Beyond. Residents from across the state attended meetings to offer their ideas about how we can create a better future for North Dakota. Among several common messages, North Dakotans said they want more diversity in their career opportunities.
Dalrymple said he recommends funding Research ND, a program in which the state's research universities can partner with the private sector to commercialize new products and create new jobs.

City Planning Services
From the 2020 & Beyond process, state officials also learned that growing communities are in need of help with city planning. Dalrymple said the state Department of Commerce plans to assist communities seeking to manage growth or enhance amenities.

Expanding Child Care Capacity
North Dakotans who participated in the 2020 & Beyond meetings also commonly expressed a need for more child care services in the state's growing communities. Dalrymple encouraged legislators to fund a grant program that will help child care providers cover the costs of expanding or establishing new child care facilities.

Streaming audio of Governor Dalrymple's speech at

Contact: Jeff Zent or Jody Link

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