- Associated Press - Wednesday, July 13, 2016

BISMARCK, N.D. (AP) - Republican Gov. Jack Dalrymple on Wednesday called a special session of the North Dakota Legislature to address shortfalls in the state treasury.

Dalrymple made the announcement at the state Capitol after an updated forecast predicted that tax collections will continue to shrink due to depressed oil and farm commodity prices. The forecast, done by the state’s economic consultancy Moody’s Analytics, predicted the deficit would swell to $310 million if nothing is done by the time the current budget cycle ends on June 30, 2017.

But the governor made it clear that North Dakota isn’t in dire financial straits, but that budget shortfalls needed to be addressed through a bill that would use of contingency funds and specific agency reductions, the latter of which can only be done by the Legislature.

The session, which is expected to cost North Dakota taxpayers about $80,000 daily, is slated to begin Aug. 2 and last three days. That’s the minimum amount of time needed to introduce and approve bills in the North Dakota House and Senate.

The governor mostly has governed during a time of unprecedented growth in North Dakota, the nation’s No. 2 oil producer behind Texas. But crop and oil prices, key contributors to the state’s wealth, have plummeted since the Legislature adjourned in May 2015 and planned its more than $14 billion two-year budget that began July 1, 2015, on overly optimistic revenue projections.

The governor ordered across-the-board cuts in state government in February, as well as a raid on the state’s rainy day fund to make up for about $1.1 billion in shortfalls for the current budget cycle. Tax collections since then are down an additional $100 million.

North Dakota’s Constitution allows the governor to call a special session on “extraordinary occasions.” The governor’s action brings to 15 the number of times the Legislature has been called into special session since statehood.

The state still has a sizable financial cushion, Dalrymple said, with hundreds of millions of dollars in various cash reserves. That doesn’t include the oil tax-funded “Legacy Fund,” which holds more than $3.8 billion, was approved by voters in 2010 and receives 30 percent of the state’s oil tax collections - though none of the money can be spent until 2017.

“No one should get the impression that North Dakota is in a financial crisis,” Dalrymple said. “It is still a very, very strong and promising economy in the state of North Dakota.”

The governor said some of the state’s shortfall could be made up by shifting profits from the Bank of North Dakota, the nation’s only state-owned bank. It set an earnings record for the 12th straight year in 2015, bringing in more than $130 million thanks in part to the once-thriving oil industry in western North Dakota. The streak of record profits began in 2004 - $34.2 million - when state’s oil boom was in its infancy.

Democratic legislative leaders said they weren’t consulted much about a special session, though Republicans who control the Legislature met with Dalrymple and majority leaders on Monday to decide how to deal with dwindling tax collections.

House Minority Leader Kenton Onstad said Dalrymple called him and Senate Minority Leader Mac Schneider that night after the meeting.

“The governor just said, ‘I don’t think the numbers are going to look good,’” Onstad said.

Dalrymple had declined two previous pleas by Democrats for a special session so lawmakers could make targeted budget reductions instead of across-the board cuts of state agencies.

Dalrymple, who has been governor since 2010, announced in August that he wouldn’t seek re-election this November.

He last called a special session in 2011, when lawmakers over the course of five days endorsed, among other things, $30 million in public works grants for local governments whose infrastructure was strained by oil development and about $700,000 to hire four new Highway Patrol officers to monitor increased traffic in the oil patch.

The North Dakota Constitution limits regular sessions of the Legislature to 80 days every two years. However, a special session called by the governor has no similar restriction and may last indefinitely.

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