North Dakota is facing a tax revenue shortfall of more than $1 billion. Lagging oil prices and falling production have drastically hurt the state's income.
During the last session, legislators used a revenue forecast to make the state's budget. State leaders say it would have been nearly impossible to foresee the dive that oil prices were going to take at the time. Now, a new revenue is in, with an updated outlook and that means trouble for most agencies.
The state thought it would bring in $5.7 billion from 2015-2017. Instead, it will bring in more than a billion dollars less than that. The Budget Stabilization Fund will cover half the shortfall. Another $332 million will come from pre-budgeted wiggle room. Finally, each state agency will be forced to cut more than 4 percent.
"4.05 was the most agencies could withstand in budget cuts without really harming some services like particularly medical services and prison services," said Pam Sharp, Office of Management and Budget director.
"We've run a pretty tight budget at the Public Service Commission. I'm proud of that but that makes situations like this even harder. But just like everyone else has to do with their own personal budgets when things slow down, we'll find ways to get even more efficient," said Randy Christmann, public service commissioner.
The driving factor behind the shortfall is the slowdown in oil production. Still, oil is also one of the reasons the state is in a position to handle the issue.
"I think all in all, we're going to be fine. It was amazing that oil could come down as much as it did, but we will deal with it," said Gov. Jack Dalrymple.
Agencies have until Feb. 17 to report to the Office of Management and Budget specifically how they will cover the allotment.
Public schools will not be affected. Their $72 million cut will be covered by the Foundation Aid Stabilization Fund.
A full list of how much each agency is losing is attached to this story.