April 19 (UPI) — Facing tariff headwinds, and despite its vast crude oil resources, North Dakota may have to cut back because of a shortage of general funds, the governor said.
North Dakota is the second-largest oil producer in the United States, behind Texas. Continental Resources, one of the biggest companies working in the state’s Bakken shale, said fourth quarter net production in North Dakota was up 58 percent from the same period in 2016 and an all-time high for the company.
North Dakota’s unemployment rate, meanwhile, is among the lowest in the nation and its government estimates there are more than 14,400 job openings state-wide.
North Dakota Gov. Doug Burgum said in a budget address that oil production of nearly 1.2 million barrels per day was well ahead of its forecast of 925,000 barrels per day. Its realized price for crude oil, meanwhile, was $10 per barrel higher than forecast.
Yet even after cutting its budget by $1.7 billion, general funding expenditures for the two years ending in 2019 exceed revenues by $800 million.
“Our largest non-oil tax revenue source, sales tax, also has flattened out,” the governor said.
The Beige Book report from the Federal Reserve Bank of Minneapolis, which covers North Dakota, said manufacturing in the state has fallen to a level that would indicate a contraction. For agriculture, U.S. Sen. Heidi Heitkamp, D-N.D., said she was concerned that federal trade policies that would target China could backfire.
“We must hold China accountable and use trade enforcement to our advantage, but those at the table shouldn’t gamble with the livelihoods of farm families,” she said in a statement Wednesday. “I won’t stand for our farmers and ranchers being shut out from critical foreign markets, and I’ll keep fighting for the ability of our rural communities to survive and thrive.”
Burgum proposed state agencies, save for Medicaid and K-12 school programs, submit budgets for the next biennium that outline a 5 percent reduction in expenses.
“Without significant change, our budget will remain structurally imbalanced,” he said.