N.D. budget surplus tops $700 million

Pam Sharp told the Legislature's interim Budget Section committee on Wednesday that state budget analysts are crafting new estimates of tax collections. The numbers should be completed by mid-July, she said.

The new forecast is a normal step in the process of drafting Gov. John Hoeven's budget recommendations for the 2009 Legislature, Sharp said. Present tax collections are now compared to revenue forecasts that were published in March 2007.

Current estimates say North Dakota's general fund treasury, which is financed mostly by taxes on income, sales, energy, tobacco and corporations, should have a balance of $271.1 million when the state's two-year budget period ends on June 30, 2009.

A separate fund for surplus oil tax collections is expected to have at least $268.9 million. North Dakota's treasury also has a "rainy-day" fund that can be accessed during budgetary difficulties; it now has a $200 million balance.

Sharp described the oil tax estimates on Wednesday as "very much understated."

"Our forecast (in March 2007) was based on $44 oil. We're at $125 now," Sharp said. "Production (was estimated) at 116,000 barrels a day, and we're at over 150,000 barrels a day."

Drafting the new estimates involves consulting with Moody's Economy.com, a national economic forecasting company, and a "revenue advisory group" of North Dakota industry leaders and legislators who review the figures.

"We just talk about what is going on in their industries in the state, and we want to make sure that what they're seeing ... is the same thing that Economy.com is telling us," Sharp said.

From July 2007 through May 2008, sales tax revenues were running 9.4 percent ahead of initial estimates, with $441.5 million in actual collections, an OMB report says.