BISMARCK â€“ North Dakota is on track to have a $696 million surplus by the end of the biennium in June, state officials announced Tuesday.
The state Office of Management and Budget released updated revenue projections for the 2009-11 biennium and preliminary revenue projections for the 2011-13 biennium.
Projections are prepared by Economy.com, the stateâ€™s economic forecasting firm, and OMB, a news release stated.
The projected general fund ending balance for the 2009-11 biennium is $66 million, and the projected Permanent Oil Tax Trust Fund ending balance is $630 million, resulting in the $696 million.
The Permanent Oil Tax Trust Fund started the biennium with a balance of $490 million, with $886 million in revenue expected to be added by the end of the biennium, OMB Director Pam Sharp said.
However, $746 million of that nearly $1.4 billion has already been spent, thus leaving the $630 million. The biggest chunk of expenditures is for property tax relief, with $295 million that went for relief this biennium.
Another $295 million went into a property tax sustainability fund for 2011-13 tax relief, Sharp said.
The state also has a $325 million reserve held over from previous bienniums in the Budget Stabilization Fund. That money canâ€™t be accessed unless there is a revenue shortfall, Sharp said.
The revised revenue projection, excluding transfers, for the 2009-11 biennium indicates revenues of $2.5 billion, just above the legislative forecast.
Looking at the general fund revenue picture in the current biennium, sales and use taxes (including motor vehicle) account for about 45 percent of total general fund revenues. Personal and corporate income taxes account for nearly 30 percent.
Tax receipts from oil provide 25 percent of total state tax revenues. By law, only $71 million of oil tax revenue is deposited into the general fund. About 90 percent of the oil tax revenue is deposited into the Permanent Oil Tax Trust Fund.
Revenues for the 2011-13 biennium, excluding transfers, are projected to be $2.72 billion, which is $236 million over the revised 2009-11 forecast.
Revenues flowing into the Permanent Oil Tax Trust Fund in 2011-13 are projected to be $698 million, which assumes passage of the Legacy Fund measure, the release stated. This would reserve an additional $613 million under the terms of the measure.
North Dakotans will vote on Measure 1 in November. The measure would require 30 percent of oil extraction and gross production tax revenue to go into the Legacy Fund.
The fund would be frozen until July 1, 2017. After that, the fundâ€™s interest would be transferred to the general fund for state spending.
For principal to be spent, two-thirds of the Legislature would need to agree. Not more than 15 percent of the principal could be spent per biennium.
Sharp said itâ€™s important to recognize the forecast covers a three-year period and projects revenues anticipated in the future.
â€œThe projection is based on major assumptions that North Dakota will continue to weather the ongoing national recession, and that oil prices will continue to average more than $70 a barrel throughout the 2011-2013 biennium,â€ she said in a statement.
Gov. John Hoeven said the stateâ€™s economic development efforts in energy, value-added agriculture, technology and tourism are providing tangible benefits.
â€œThe stateâ€™s broad-based economic growth will enable North Dakota to fund priorities, provide sustained tax relief and continue to build a strong reserve for the future,â€ Hoeven said in a statement.
Another updated revenue projection will be done in November, prior to the legislative session, for the budgeting process.