North Dakota state budget and finances

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North Dakota budget and finances
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General information
Budget calendar:
Biennial
Fiscal year:
2017
State credit rating:
AA+ (as of 2017)
Current governor:
Doug Burgum
Financial figures
Total spending (state and federal funds):
$8,054,000,000 (estimated 2016)
Per capita spending:
$10,626 (estimated 2016)
Total state tax collections:
$3,709,105,000 (2016)
Per capita tax collections:
$4,894 (2016)
State debt:
$2,063,788,000 (2014)
Per capita state debt:
$2,727 (2014)
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State budget and finance pages • Total state expenditures • State debt • Tax policy in North Dakota
Note: In comparing dollar amounts across the states, it is important to note that the cost of living can differ from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis. This article, which is updated on an annual basis, was last updated in June 2017. It contains information from several sources; consequently, the currency of the information can vary from source to source.

In North Dakota, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS
  • Between fiscal years 2015 and 2016, total government spending in North Dakota increased by approximately $131.0 million—from $7.9 billion in fiscal year 2015 to an estimated $8.1 billion in 2016. This represents a 1.7-percent increase.[1]
  • In North Dakota in fiscal year 2015, 41.8 percent of total tax revenues came from sales taxes and gross receipts. Income taxes accounted for 12.2 percent of total state tax collections.
  • Education accounted for 30.3 percent of state expenditures in fiscal year 2015, while 14 percent went to Medicaid.

    • Definitions

    The following terms are used to describe a state's finances:

    • Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
    • Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
    • State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
    • The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
    • State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."[2]
    • Federal funds are "funds received directly from the federal government."[2]
    • Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

    Revenues

    2016 revenues

    See also: State government tax collections by source

    The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.[3]

    State tax collections by source ($ in thousands), 2016
    State Property taxes Sales and gross receipts Licenses Income taxes Other taxes Total 2016 population Per capita collections
    North Dakota $3,910 $1,496,824 $204,055 $454,194 $1,550,122 $3,709,105 757,952 $4,894
    Minnesota $849,824 $10,120,647 $1,426,235 $12,248,267 $544,155 $25,189,128 5,519,952 $4,563
    Montana $278,497 $562,474 $319,020 $1,300,011 $167,941 $2,627,943 1,042,520 $2,521
    South Dakota N/A $1,440,041 $268,227 $32,684 $6,598 $1,747,550 865,454 $2,019
    United States $18,364,298 $442,909,995 $52,164,396 $392,286,910 $24,538,146 $930,263,745 322,762,018 $2,882.20
    Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017

    The table below lists 2016 tax collections by source as percentages of total collections. About 41.8 percent of North Dakota's total state tax collections came from sales taxes and gross receipts.[3]

    State tax collections by source (as percentages), 2016
    State Property taxes Sales and gross receipts Licenses Income taxes Other taxes
    North Dakota 0.1% 40.4% 5.5% 12.2% 41.8%
    Minnesota 3.4% 40.2% 5.7% 48.6% 2.2%
    Montana 10.6% 21.4% 12.1% 49.5% 6.4%
    South Dakota N/A 82.4% 15.3% 1.9% 0.4%
    Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016


    Federal aid to the state budget

    See also: Federal aid to state budgets

    State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2014, federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.2 billion in federal aid in 2014, accounting for about 41 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2014, or just 17 percent of the state's general revenues, the lowest percentage in the nation.[4]

    The table below notes what share of North Dakota’s general revenues came from the federal government in 2014. That year, North Dakota received approximately $1.5 billion in federal aid, 16.8 percent of the state's general revenues. Taking into consideration the state's 2014 population, this came out to about $2,005 in federal aid per capita. Figures from surrounding states are provided for additional context.[4]

    Federal aid to state budgets, 2014
    State Total federal aid ($ in thousands) Federal aid as a % of general revenues Ranking (by % of general revenues) Est. 2014 population Aid per capita
    North Dakota $1,483,627 16.8% 50 739,904 $2,005
    Minnesota $8,877,099 24.0% 48 5,453,109 $1,628
    Montana $2,335,571 39.1% 4 1,022,867 $2,283
    South Dakota $1,547,210 37.2% 7 852,561 $1,815
    Sources: United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017
    Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2014.

    Spending

    Estimated 2016 expenditures

    See also: Total state expenditures

    The table below breaks down estimated spending totals for fiscal year 2016 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[5]

    The total estimated government spending in North Dakota in fiscal year 2016 was $8.1 billion.

    Total estimated state spending, FY 2016 ($ in millions)
    State State funds Federal funds Total spending Population Per capita spending
    North Dakota $6,275 $1,779 $8,054 757,952 $10,626
    Minnesota $26,715 $11,494 $38,209 5,519,952 $6,922
    Montana $4,014 $2,370 $6,384 1,042,520 $6,124
    South Dakota $2,686 $1,364 $4,050 865,454 $4,680
    Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates.
    Source: National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017

    Spending by function

    See also: State spending by function as a percent of total expenditures

    State spending in North Dakota can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2015 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[5]

    In fiscal year 2015, other spending accounted for 33.2 percent of North Dakota's total expenditures.

    State spending by function as a percent of total expenditures, FY 2015
    State K-12 education Higher education Public assistance Medicaid Corrections Trans-
    portation     		Other
    North Dakota 13.8% 16.5% 0.1% 14% 1.4% 21.1% 33.2%
    Minnesota 25.1% 4.9% 1.4% 29.9% 1.5% 10.8% 26.4%
    Montana 15.8% 10.4% 0.5% 17.4% 3.3% 11.7% 41.0%
    South Dakota 14.8% 17.8% 0.5% 21.4% 2.7% 14.2% 28.6%
    Source: National Association of State Budget Officers
    Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[5]

    Spending trends

    The table below details the spending trends in North Dakota in previous years. Figures are rendered as percentages, indicating the share of the total budget spent per category.[1][6][7]

    Spending by function from 2010 to 2015 (as percentages)
    Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
    2015 13.8% 16.5% 0.1% 14% 1.4% 21.1% 33.2%
    2014 15.8% 17.3% 0.1% 12.9% 1.6% 19.0% 33.4%
    2013 15% 19% 0.1% 13.7% 1.9% 16.1% 34.2%
    2012 13.8% 17.7% 0.1% 12.1% 1.9% 16.4% 38.0%
    2011 15.8% 20.6% 0.1% 14.3% 1.8% 12.4% 35.0%
    2010 16.6% 20.7% 0.2% 13.7% 1.8% 11.3% 35.8%
    Source: National Association of State Budget Officers
    Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[5]

    State debt

    See also: North Dakota state debt

    State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, North Dakota had a debt of $2,063,788,000 in fiscal year 2015. The state debt per capita was $2,727. This ranked North Dakota 48th among the states in debt and 33rd in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.[8]

    Economic indicators

    See also: Economic indicators by state
    North Dakota's GDP increased by 6.3 percent in 2014. Click the image to view a larger version.

    Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.[9][10][11]

    In September 2014, North Dakota had the lowest unemployment rate in the country at 2.8 percent. Its median annual household income was $55,583, and most North Dakota residents earned incomes at least 400 percent of the federal poverty level.[12][13][14][15]

    Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

    Various economic indicators by state
    State Distribution of population by FPL* (2013) Median annual income (2011-2013) Unemployment rate Total GSP (2013)†
    Under 100% 100-199% 200-399% 400%+ Sept. 2013 Sept. 2014
    North Dakota 10% 17% 33% 40% $55,583 2.8% 2.8% $56,329
    Montana 15% 19% 35% 31% $43,924 5.6% 4.6% $44,040
    South Dakota 11% 17% 35% 37% $50,488 3.7% 3.4% $46,732
    Wyoming 12% 18% 31% 39% $56,569 4.6% 4.7% $45,432
    United States 15% 19% 30% 36% $52,047 7.2% 5.9% $16,701,415
    * Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government."
    † Median annual household income, 2011-2013.
    ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state."
    Source: The Henry J. Kaiser Family Foundation, "State Health Facts"


    Budget process

    State documents and agencies
    Below are links to official North Dakota budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office.

    The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[16]

    1. Budget instructions are sent to state agencies between April and May of the year preceding the start of the new biennium.
    2. State agencies submit their budget requests to the governor between July and October.
    3. The governor submits his or her proposed budget to the state legislature in December.
    4. The legislature typically adopts a budget in April. A simple majority is required to pass a budget. The new biennium begins in July.

    North Dakota is one of 44 states in which the governor has line item veto authority.[16][17]

    The governor is constitutionally required to submit a balanced budget proposal. Likewise, the state legislature is required to pass a balanced budget.[16]

    Agencies, offices, and committees

    There are four major standing committees in the North Dakota Legislative Assembly that play a part in budget and financial matters: the North Dakota House Appropriations Committee, the North Dakota House Finance and Taxation Committee, the North Dakota Senate Appropriations Committee, and the North Dakota Senate Finance and Taxation Committee.[18][19]

    Public Interest Research Group 2016 report

    The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2016. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. According to the report, North Dakota received a grade of D+ and a numerical score of 64, indicating that North Dakota was "Lagging" in terms of transparency regarding state spending.[20]

    Budget and finance ballot measures

    Voting on state and local government budgets, spending, and finance
    State finance.jpg
    Policy
    Budget policy
    Ballot measures
    By state
    By year
    Not on ballot
    See also: State and local government budgets, spending and finance on the ballot and List of North Dakota ballot measures

    Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in North Dakota.

    1. North Dakota Bicentennial Trust Fund, Measure 3 (1992)
    2. North Dakota Initiative Measure Fiscal Impact Referendum, Constitutional Measure 2 (2004)
    3. North Dakota Resources Trust Fund, Measure 2 (1990)
    4. North Dakota Common Schools Trust Fund, Constitutional Measure 1 (2006)
    5. North Dakota Use of Coal Tax Revenue, Measure 3 (1990)
    6. North Dakota Veterans' Postwar Trust Fund, Measure 4 (1996)
    7. North Dakota Permanent Oil Tax Trust Fund, Constitutional Measure 1 (2008)
    8. North Dakota Deposit of Public Funds Initiative (1920)
    9. North Dakota School Funds Referendum (1920)
    10. North Dakota Debt Limit of Political Subdivisions Referendum (1920)
    11. North Dakota Public Depositories Initiative (1921)
    12. North Dakota Reducing County Officers Mileage Initiative (1932)
    13. North Dakota Five Year Debt Moratorium Initiative (1932)
    14. North Dakota Reducing State Officials Mileage Initiative (1932)
    15. North Dakota Three Year Debt Moratorium Initiative (1932)
    16. North Dakota Federal Funds for Political Purposes Initiative (1936)
    17. North Dakota Board of Finance and Administration Initiative (1940)
    18. North Dakota Reallocating Basis of Need Payments Initiative (1940)
    19. North Dakota Basis of Need Payments State Equalization Fund Initiative (1940)
    20. North Dakota Investment of Permanent School Fund Referendum, Amendment 2 (1950)
    21. North Dakota Aviation Fuel Tax Referendum, Amendment 4 (1960)
    22. North Dakota Agricultural and Educational Funding Separation, Referendum 2 (1962)
    23. North Dakota Agricultural and Educational Funding Separation, Referendum 1 (1964)
    24. North Dakota State Debt and Bonds, Referendum 1 (1965)
    25. North Dakota Higher Education Costs Referendum, Number 1 (1968)
    26. North Dakota Investment of Institutional Trust Funds Referendum, Amendment 3 (1970)
    27. North Dakota Capitol Multipurpose Building Referendum, Measure 1 (1970)
    28. North Dakota Department of Accounts and Purchases Appropriation Referendum, Measure 1 (1971)
    29. North Dakota County and Municipal Debt Limits Referendum, Amendment 1 (1972)
    30. North Dakota General Fund Appropriations Limits Initiative, Measure 1 (1976)
    31. North Dakota State Revenue Sharing Initiative, Measure 1 (1978)
    32. North Dakota Game and Fish Department Income Initiative, Measure 3 (1978)
    33. North Dakota Salaries of Public Officials Referendum, Amendment 8 (1978)
    34. North Dakota Cross Ranch Veterans Memorial Park Referendum, Measure 8 (1980)
    35. North Dakota Coal Development Impact Trust Fund Referendum, Amendment 5 (1980)
    36. North Dakota School Trust Fund Deposit and Use Referendum, Measure 3 (1982)
    37. North Dakota Veterans Post War Trust Fund, Measure 4 (1988)
    38. North Dakota Coal Trust Fund Expenditures, Measure 1 (1994)
    39. North Dakota Oil Extraction Tax Revenues, Measure 1 (1994)
    40. North Dakota State Legacy Fund Establishment, Measure 1 (2010)
    41. North Dakota Constitutional Measure 3, Legacy Fund Transfers Amendment (2024)

    Budget and finance legislation

    The following is a list of recent budget and finance bills that have been introduced in or passed by the North Dakota state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

    Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

    Recent news

    The link below is to the most recent stories in a Google news search for the terms North Dakota budget. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

    North Dakota state budget and finances - Google News

    See also

    Footnotes

    1. ↑ 1.0 1.1 National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017
    2. ↑ 2.0 2.1 National Association of State Budget Officers, "State Expenditure Report: 2013-2015," accessed April 7, 2016
    3. ↑ 3.0 3.1 U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017
    4. ↑ 4.0 4.1 United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017
    5. ↑ 5.0 5.1 5.2 5.3 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
    6. ↑ National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
    7. ↑ National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
    8. ↑ United States Census Bureau, "State Government Finances," accessed June 4, 2017
    9. ↑ Academy Health, "Impact of the Economy on Health Care," August 2009
    10. ↑ The Conversation, "Budget explainer: What do key economic indicators tell us about the state of the economy?" May 6, 2015
    11. ↑ Health Affairs, "Socioeconomic Disparities In Health: Pathways And Policies," accessed July 13, 2015
    12. ↑ The Henry J. Kaiser Family Foundation, "Distribution of Total Population by Federal Poverty Level," accessed July 17, 2015
    13. ↑ The Henry J. Kaiser Family Foundation, "Median Annual Household Income," accessed July 17, 2015
    14. ↑ The Henry J. Kaiser Family Foundation, "Unemployment Rate (Seasonally Adjusted)," accessed July 17, 2015
    15. ↑ The Henry J. Kaiser Family Foundation, "Total Gross State Product (GSP) (millions of current dollars)," accessed July 17, 2015
    16. ↑ 16.0 16.1 16.2 National Association of State Budget Officers, "Budget Processes in the States, Spring 2021," accessed January 24, 2023
    17. ↑ National Conference of State Legislatures, "Separation of Powers: Executive Veto Powers," accessed January 26, 2024
    18. ↑ North Dakota Legislative Assembly, "House standing committees," accessed March 10, 2015
    19. ↑ North Dakota Legislative Assembly, "Senate standing committees," accessed March 10, 2015
    20. ↑ U.S. Public Interest Research Group, "Following the Money 2016 Report," accessed June 29, 2017
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