North Dakota General Fund Exceeds Expected Goal by More than $200 Million – InForum

BISMARCK — Robust oil and gas revenues and interest income are filling North Dakota’s general fund coffers.

North Dakota’s general fund was about $236 million over target at the end of February, according to a presentation the Office of Management and Budget gave to lawmakers on Tuesday, March 19.

That’s about 13.5% more than the state projected for the 2023-2025 budget cycle.

The general fund makes up about one-third of North Dakota’s overall budget. Most of the General Fund’s money comes from energy, income, sales, use, and motor vehicle taxes.

Susan Sisk, director of the Office of Management and Budget, told members of the Government Finance Committee on Tuesday that some of the major sources of general fund revenue, including sales, motor vehicle, personal and corporate taxes, were higher than expected. The same goes for North Dakota’s oil industry. It performs better than expected. Oil revenues through the end of February were expected to be around $1.6 billion, but are now estimated at $1.8 billion.

“Oil and gas is a big driver of all of this, and they’re all going up because oil prices and production are going up,” Sisk said at the meeting.

According to a Feb. 29 Office of Management and Budget report, funds collected through sales taxes make up the bulk of the general fund. Sales tax revenue from July to February was about $849 million, about 14.9% higher than expected.

Income tax revenue also exceeded last year’s expectations. As of the end of February, total collections were about $177 million, about 10.9% higher than the state’s expectations.

This represents a rebound from November’s numbers, when personal income tax revenues were about 5% lower than expected.

Corporate tax collection was also strong. In 2023, North Dakota is expected to receive about $93 million in revenue by the end of February, but the report says revenue has already exceeded $128 million.

Motor vehicle excise tax collections were slightly higher than expected, with revenue of approximately $58 million compared to the expected $56 million.

Mineral lease fees were about 50% higher than expected, and collections from state agencies were nearly twice as high as expected, according to the Feb. 29 report.

Only two tax categories were lower than expected: insurance premium taxes and cigarette taxes. Revenues were 9.7% and 5.1% below target, respectively.

Income earned from general fund interest is also included in the report.

The state expected expected interest income to be $386,723, but by Feb. 29 it had already earned about $48 million.

This difference is due in part to the fact that the General Fund began the 2023-2025 budget cycle with significantly more money than the state plans. The fund brought in more than $1 billion in revenue during the 2021-23 budget period, more than expected, and the state returned about $100 million in unspent funds, the North Dakota Monitor previously reported.

The state expects the general fund to collect a total of $5.2 billion in revenue over the 2023-2025 budget cycle, according to the report.

This article was originally published on NorthDakotaMonitor.com