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Member-Exclusive Policy Outlook: ND State Revenue Outlook with OMB
North Dakota’s fiscal picture is steady — but tightening. During our recent member-exclusive policy outlook, business leaders heard directly from North Dakota Office of Management and Budget Director Joe Morrissette on what’s ahead for the state budget.
This wasn’t just a presentation. Members had the opportunity to ask questions in real time and press into what the numbers actually mean for employers, taxpayers, and long-term competitiveness.
KEY TAKEAWAYS:
>> Revenues Are Stable — But Flexibility Is Shrinking
State revenues are tracking very close to forecast. If projections hold, the state will close the biennium with about $400 million in carryover. That’s solid — but significantly lower than previous cycles that ended with balances closer to $1.5 billion.
>> The Core Challenge: Structural Imbalance
The issue is not economic decline. It’s spending growth outpacing ongoing revenue.
When asked what perspective policymakers and the public should keep in mind during this cycle, Morrissette responded candidly:“We have been growing ongoing spending at an unsustainable rate. We've exceeded the rate of growth in our ongoing revenues… Not because we have limited revenues because of economic decline… We have made policy changes like income tax relief that have affected our ongoing revenues… A recognition that the coffers of the state are not unlimited is important. We are going to have to ask agencies to come to the table with ideas for reduction… We don't have that beginning balance that we've had in the past… We are going to have to trim spending in order to bring that budget into balance.”That exchange captured the tone of the discussion: steady economy, but serious structural decisions ahead.
>> Oil’s Influence Remains Strong
Oil and mining account for roughly 15% of state GDP. Production is slightly above forecast, though prices are softer than expected.
Sales tax — the state’s largest revenue source — is closely tied to energy-driven activity. When oil fluctuates, state revenues feel it.
Attending Members were able to ask direct questions about volatility, forecasting, and long-term stability — context that is difficult to capture in a slidedeck alone.
>> Reserves Are Strong — and Protected
North Dakota maintains substantial reserve funds, including nearly $1 billion in its Budget Stabilization Fund and more than $13 billion in the Legacy Fund. But tapping those funds requires spending reductions first. That safeguard reinforces fiscal discipline and protects the state.
This was more than a numbers update. It was an opportunity for business leaders to engage directly with the state’s chief budget official, clarify assumptions, and understand how decisions made this year will shape the economic climate ahead.
North Dakota is not facing crisis. Revenues are stable. Reserves are strong.
The path forward will require spending discipline, sharper prioritization, and a realistic understanding of revenue constraints. The discussion reinforced that the decisions ahead will shape the state’s fiscal stability and overall business climate — and that informed engagement in these conversations is critical as policy direction is set.