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The Bismarck-Mandan Young Professionals Network is pleased to announce the creation of a government affairs task force. The purpose of this education-focused group is to update YPN members with information about legislation during the North Dakota legislative session. The nature of the task force will be non-partisan and will function in an educational capacity only.
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YP Legislative Update - "Show me the money"
Posted 2/16/09 (Mon)
By The BMYP Government Affairs Task Force
One of the key functions of the legislature is to approve a budget when they meet every two years. The state’s budget includes funding for many important priorities such as educating our kids and college students, providing safe roads and bridges, and keeping our citizens safe. A few recent events occurred that will have an impact on legislative appropriations. These include a revised state revenue forecast, the deadline for bills to be rereffered to the appropriations committees, and Congressional action on an economic stimulus package. First, we’ll give an overview the budgeting process.
The Governor, with the assistance of the Office of Management and Budget, puts together an executive budget recommendation which serves as the starting point for the legislature. The Governor presents his recommendations to legislators at their orientation session in early December prior to the legislative session. The executive budget recommendation that the legislature acts upon is in the form of 47 appropriation bills. These bills go through the same process as other bills in which they receive a public hearing, have committee recommendations (in this case by the appropriations committees), and are voted on by the full House and Senate. One difference is that the Governor can veto specific sections of an appropriations bill, whereas he can only veto or sign complete non-appropriations bills.
The Governor based his recommendations on a revenue forecast that was made in November, 2008. This past week, a revised revenue forecast was presented to legislators – which will serve as the basis for legislative decisions concerning the final budget they approve. The revised forecast showed a decrease in general fund revenues of $38 million for the upcoming biennium. It also showed a decrease of $87 million going into a special fund called the “Permanent Oil Tax Trust Fund,” although they still project an ending balance of over $600 million in this fund. A copy of the revised revenue forecast is available at http://www.nd.gov/omb/docs/rev-forecast-all-2-9-09.pdf.
As some legislators have said, the Governor is not the only one with ideas on how to spend money. Legislators may also introduce bills that appropriate dollars or affect revenues. These bills traditionally go through a policy committee first and then, if recommended for a “Do Pass” by the committee, go to the appropriations committee. The policy committees had a deadline of Thursday, February 5th to make their recommendations on bills affecting appropriations. The appropriations committees have been busy this past week taking action on a host of rereffered bills.
In addition to state revenues, the legislature also provides spending authority for Federal dollars that are received by the state. The U.S. House of Representatives and U.S. Senate have both approved versions of an economic stimulus package that could provide millions of dollars to the state. The U.S. Congress will reportedly vote on a final economic stimulus bill soon and President Obama could sign it within a week. North Dakota legislators are keeping a close eye on congressional action and will be working any new federal dollars into North Dakota’s state budget during the second half of the session.
A quick update on a bill reported on last week. HB 1440 dealing with pharmacy ownership was defeated by the House of Representatives by a vote of 35-57.
To keep with the money theme, information on a few tax related bills you may be interested in are listed below.
CLOTHING SALES TAX EXEMPTION
HB 1268 – Would exempt clothing items from the sales tax.
Action: Rereffered to House Appropriations
SALES TAX REDUCTION
HB 1521 – Would reduce the state sales tax rate from 5.0% to 4.5% during the 2009-2011 biennium.
Action: House Finance and Taxation recommended “Do Not Pass” by a vote of 7-6
INCOME TAX REDUCTIONS FOR INDIVIDUALS
HB 1279 – Would reduce income tax rates starting in the 2009 tax year at an estimated cost of $100 million for the 2009-2011 biennium.
Action: Rereffered to House Finance and Taxation
INCOME TAX REDUCTION AND STIMULUS PAYMENTS
HB 1324 – Would provide $100 million in state economic stimulus payments to taxpayers in May, 2009 based upon their 2007 income taxes paid and would reduce income tax rates starting in the 2011 tax year.
Action: Rereffered to House Finance and Taxation
CHILD INCOME TAX CREDIT
HB 1243 – Would provide a $100 refundable tax credit for each child of the taxpayer under 10 years old.
Action: Rereffered to House Appropriations
PROPERTY TAX RELIEF BY SCHOOL ALLOCATIONS
SB 2199 – Would provide additional state funding to school districts in exchange for the school districts reducing property taxes. HB 1013 contains authority for funds to be used from the Permanent Oil Tax Trust Fund to be used for this purpose.
Action: Senate Appropriations Committee hearing on February 17
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