ND Economy Remarkable Shift Over 10 Years 2007 - ND GDP $29 B 2017 - ND GDP $53 B Mining Mining Wholesale 10% 4% 7% Wholesale Retail 9% 7% All other Retail categories All other Ag 6% 34% categories 9% 41% Ag 5% Const. 4% Trans. Const. 4% 7% Ed./health Trans. Finance/real Ed./health care 5% estate Finance/real care 8% 15% estate 9% 16% 2
ND’s Incredible Growth From 2009-2014 $70 $25 $59 $60 $20 $50 ND and SD (Billions) US (Trillions) $15 $40 $30 $32 $10 $20 $5 $10 $0 $0 ND SD US State Gross Domestic Product (GDP) 3
ND’s Oil Boom – Growth in Oil Production Corresponds to Growth In GDP 1.4 1.28 1.18 1.2 1.0 Millions BOPD 1.04 0.8 0.6 0.4 0.09 0.2 0.0 Annual Oil Production in Millions of Barrels Per Day 4
ND Oil Tax Revenues Volatile History – Return to Growth $7 $6.0 $6 $5 $4.6 $4.5 $4.0 Billions $4 $2.9 $3 $2 $1.6 $0.8 $1 $0.4 $0.2 $0 2003-05 2005-07 2007-09 2009-11 2011-13 2013-15 2015-17 2017-19 2019-21 5
Oil Tax Revenues Exceed General Fund Revenues $5.0 $4.5 $4.5 $3.8 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 General fund Oil taxes 2017-19 Biennium - General fund revenues excluding oil taxes compared to total oil taxes (in Billions) 6
2017-19 General Fund Revenue Sources Heavy Reliance on Sales Tax Dept Collections 2% Transfers/Misc Sales, Use, and 22% Motor Vehicle Tax 43% Coal Tax 1% Oil Tax 9% Corp Income Tax 3% Cig & Tobacco Tax 1% Ins Premium Tax Individual Income Tax 2% 17% 2017-19 Executive Forecast 7 December 2018
Sales Taxes Return to Growth After 40% Decline $1,400 $1,265.8 $1,200 $985.7 $1,000 $829.1 $800 Millions $792.5 $600 $400 $200 $0 8
Executive Budget Priorities • Develop accurate revenue forecast using best practices • Limit growth in ongoing spending • Balance ongoing state revenues and expenses • Use one-time revenues for one-time expenses • Use Legacy Fund earnings for one-time investments with lasting impact • Restore state savings account 9
Replenishing Rainy Day Fund 741 741 Transfer from Transfer from 584 584 573 573 Strategic Investment Strategic Investment 315 315 & Improvements & Improvements Fund Fund 386 386 325 325 Transfer from Transfer from 312 312 General Fund General Fund 200 200 Oil and Gas Oil and Gas 100 100 Tax Allocations Tax Allocations 75 75 38 38 Beginning Beginning Balance Balance 0 38 38 03 03-05 05 05-07 05 07 07-09 07 09 09-11 09 11 11-13 11 13 13-15 13 15 15-17 15 17 17-19 17 19 19-21 19 21 Proposed Proposed Budget Stabilization Fund Budget Stabilization Fund Balance at the beginning of the biennium ($ millions) 10
Joe Morrissette Director jmorrissette@nd.gov 701.328.4606 600 East Boulevard Avenue, Dept. 110 Bismarck ND 58505-0400 nd.gov/omb
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