Burgum unveils Accelerate ND plan with strategic investment of federal funds, tax relief for citizens (2024)

BISMARCK, N.D.– Gov. Doug Burgum today unveiled his “Accelerate ND” plan containing his executive recommendations to the state Legislature for strategically investing federal funds from the American Rescue Plan Act (ARPA). As part of the plan, the governor also proposed using a portion of the state’s near-record ending fund balance from the 2019-21 budget to provide an estimated $207 million of income tax relief over two years, support economic development and provide long-term cost savings to North Dakota taxpayers, all without raising taxes.

Burgum announced the plan with Lt. Gov. Brent Sanford and State Budget Director Joe Morrissette during a press conference at the State Capitol.

“With the Accelerate ND plan, we have an unprecedented opportunity to move North Dakota forward right now by making one-time investments that will grow and diversify our economy, make our state more competitive, improve the efficiency of government services, provide tax relief and create long-term cost savings for the citizens of North Dakota,” Burgum said. “Thanks to our conservative fiscal management, we can accomplish these goals without growing government and provide a high return on investment for taxpayers.”

INVESTING ARPA FUNDS STRATEGICALLY

Approved by Congress in March 2021, the American Rescue Plan Act allocated a total of $3.2 billion to North Dakota. Approximately $1.85 billion was dedicated to economic impact payments to individuals and program grants to specific entities, while $242 million is going directly to cities and counties.

The State of North Dakota received the remainder of the funds in the form of $1.008 billion in ARPA State Fiscal Relief funds and $113 million in ARPA Coronavirus Capital Projects funds, for a total of $1.12 billion in ARPA funds designated for distribution by the state.

However, Burgum noted that $423 million of that $1.12 billion, or 38%, already has been appropriated: The Legislature last spring authorized $317 million for transportation infrastructure and $106 million for capital projects if federal funding could be identified and if the projects fell within the allowable uses under federal guidelines. Burgum is recommending the Legislature reauthorize those appropriations.

With the remaining $697 million in unappropriated ARPA funds, the governor is recommending investments in in three core areas:

• $326 million for workforce and economic development.
• $237 million for infrastructure and capital improvements.

• $134 million for emergency response, health care and citizen service efficiency.

When looking at the entire $1.12 billion, including the items already appropriated by the Legislature, the Accelerate ND plan calls for investing a total of:

• $396 million in workforce and economic development.
• $590 million in infrastructure and capital improvements.
• $134 million in emergency response, health care and citizen service efficiency.

Examples of key investments in each category are listed at the end of this release.

Burgum said investing ARPA dollars now will help address immediate needs, avoid inflation and rising construction costs – allowing contracts to be bid this winter for the 2022 construction season – and help North Dakota stay competitive with other states deploying their ARPA dollars for infrastructure and to address workforce shortages.

The governor noted North Dakota is in a strong financial position. The state’s rainy-day fund, the Budget Stabilization Fund, is now filled to its maximum level, a record-high $749 million; the Strategic Investment and Improvements Fundhas an unobligated balance of $567 million; and the 2019-21 biennium ended June 30 with a near-record general fund balance of $1.12 billion, exceeding what the Legislature obligated for the 2021-23 budget by $412 million.

EXCESS ENDING FUND BALANCE ALLOWS FOR TAX RELIEF

In addition to addressing ARPA funds, the Accelerate ND plan recommends a three-pronged approach to investing the excess general fund balance, targeting the money at income tax relief for resident taxpayers ($207 million), economic development ($100 million) and shoring up the state’s pension fund ($100 million) to reduce long-term costs to taxpayers.

Burgum recommends using approximately $207 million of the excess fund balance to provide an individual income tax credit of up to $500 per filed return, per year, for 2021 and 2022 for North Dakota resident taxpayers.

“Between the pandemic, the economic slowdown that accompanied it, and the historic drought conditions that continue to cause real hardship for farmers, ranchers and Main Streets, North Dakotans deserve a measure of relief,” Burgum said. “Thanks to sound planning and conservative fiscal management, the state can afford to provide this two-year income tax break to the hardworking citizens who kept our economy functioning through the pandemic.”

In addition, Burgum proposes investing $100 million of the excess funds to further drive economic development and research through existing state programs including LIFT, the North Dakota Development Fund and the newly created Clean Sustainable Energy Fund, as well as a new agriculture-energy alliance between the state’s two research institutions, North Dakota State University and the University of North Dakota.

Finally, the governor recommends using $100 million of the ending fund balance as a cash infusion into the state’s pension fund to address the fund’s estimated $1.6 billion unfunded liability, which negatively affects local bond ratings and increases borrowing costs at all levels of government. This infusion would be contingent on the Legislature completing its work to move new hires from a defined benefit to defined contribution plan while protecting existing Team ND members.

Burgum said he will continue working with legislative leaders on plans for a special session to address the ARPA funds and excess ending fund balance. Legislators have tentatively targeted the week of Nov. 8 for a special session to address redistricting.

A sampling of key investments from the plan is below. The Office of Management and Budget’s presentation of the plan, including a breakdown of proposals by agency, is available here. The governor’s presentation is available here.

KEY INVESTMENTS OF ACCELERATE ND PLAN

• $396 million for workforce and economic development includes:
  • $35 million in matching grants for companies expanding benefits and incentives to attract talent from other states and for local efforts to address the state’s workforce shortage.

• • $9.6 million in matching grants for employers who want to offer their employees a child care benefit, as affordable child care remains a barrier to workforce entry;
  • $6.8 million in tuition support for individuals pursuing degrees in early childhood education.
  • $25 million for a Polytechnic Workforce Development Center at Bismarck State College to offer hands-on applied learning matched to industry needs.
  • $21 million for rural housing redevelopment to address housing needs in rural areas of the state.
  • $80 million to establish five additional Career Academies across the state, which includes $70 million in matching grants already approved by the Legislature earlier this year.
  • $100 million in matching funds to support the buildout of pipelines and other infrastructure to serve existing and new industries and communities that currently lack natural gas service, especially in central and eastern North Dakota, which will help drive economic development.
  • $25 million to support Clean Sustainable Energy projects and $20 million for hydrogen development grants.
  • $10 million each for regional and community attraction grants to boost tourism; expansion of the Vantis statewide network for unmanned aircraft systems; matching grants to support autonomous agriculture development; and matching grants for bioscience ventures.
  • $6.5 million for livestock finishing and processing.
  • $6.4 million to convert abandoned oil wells to permanent water supply wells to enhance economic resiliency against drought conditions.

• $590 million for infrastructure and capital improvements includes:
  • $355 million in road and bridge projects, including reconstruction on a portion of Interstate 29; installing median cable guardrail on all of I-29 and I-94 to prevent cross-median crashes; building a four-lane highway from Watford City to the Long X bridge, eliminating a dangerous section of head-to-head highway; and support for township roads across the state.
  • $105 million for critical water infrastructure, including $30 million for sewer and nonpoint source projects for wastewater, storm sewer and other eligible improvements and $25 million for replacing lead service lines that have the potential to contribute unacceptable levels of lead to drinking water. North Dakota has already identified 4,290 full-service line replacements for the 2021 priority list.
  • $30 million in competitive grants to ensure that every serviceable address in North Dakota can procure quality broadband services. Currently an estimated 10,000 serviceable addresses in at least 23 counties lack quality broadband access.
  • $33 million For state park facility improvements and deferred maintenance.

• $134 million for emergency response, health care and citizen service efficiency includes:
  • $13 million to modernize North Dakota’s unemployment insurance program and ensure its self-service and staff functionality are maintained.
  • $30 million to renovate the state’s Public Health Laboratory to address space constraints, safety and security concerns and the need for surge capacity in the existing aging state lab and allow for growth and expansion, including opportunities for research partnerships.
  • $4 million for community-based behavioral health initiatives.
  • $3 million to increase program capacity and limit wait times for Free Through Recovery, a program created to increase access to recovery support services for individuals engaged with the criminal justice system who have serious behavioral health concerns that impact their daily living.
  • $1.2 million for first responder training and a high-risk infection disease ambulance project.
  • $36 million for cybersecurity enhancements.
  • $2.5 million for a school board leadership and development initiative.