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Posted 9/22/10 (Wed)

By Neal A. Shipman
Farmer Editor

Fueled by an influx of oil revenue from western North Dakota energy development, North Dakota’s tax coffers are virtually overflowing with a potential state surplus of $800 million next year. And that’s a good thing. Having a healthy budget surplus is something that North Dakota, unlike so many other states, is something that we can be proud of.
And the North Dakota Legislature has done an admirable job of infusing reinvesting some of our state’s new found wealth into programs such as education, social services while still providing much needed property tax relief to the taxpayers.
But as the cash keeps flowing into the state’s treasury, you can bet that there will be those in state government that are just standing in the wings with their hands out.
A case in point is the North Dakota Higher Education System. Last week Bill Goetz, who is North Dakota’s university system chancellor, told legislators and news media, that the higher education system  keep pace with its programs.
Now if the state legislature had been stingy in the past in its funding of the state’s colleges and universities, maybe Goetz would be right in saying that more money is needed for higher education. But that has hardly been the case.
In 2009 the state legislature made a huge commitment to our state’s 11 public colleges and universities by approving a 26 percent budget increase, raising overall spending from $634 million to $796 million.
And now, here stands Goetz wanting the state to tack on an additional 20 percent, or another $159.2 million, to  in the higher education system’s budget for the next two years.
And just what would this additional 20 percent budget increase be used for?
According to Goetz, with the advanced technology at the universities and colleges, the continuation of the state’s scholarship program for all students who qualify, financial aid for the unmet needs for many students, plus salary increases there just doesn’t seem to be much wiggle room in the system’s current budget.
But how about tuition help for students and their parents? According to Goetz, the proposed budget with its 20 percent increase calls for a pledge of no tuition increases at community colleges and a four percent maximum yearly increase at the four-year schools.
A 20 percent budget increase for the university system with little or no tuition help for the vast majority of North Dakota students just doesn’t make sense.
Even with North Dakota’s flush cash position, back-to-back budget increases of 20 percent or more for the state’s higher education system is completely wrong.
More importantly budget increases of this type are not sustainable.
What will happen if something should happen in the oil industry that results in the state’s tax revenues taking a nose dive? Will Goetz and the university system be the first ones to step up to the plate and say to the legislature “we’re willing to cutback back on technology, eliminate programs, positions and slash staff salaries, and forego  scholarships and financial aid programs to students? Probably not. That’s not the way that the university system works.
Obviously, the state is in a financial position where once again, the North Dakota Legislature will be able to look at providing more funds to critical needs around the state. But the challenging task before the legislature will be sorting through what are the real needs and what are the excess needs when it comes to funding.
A 20 percent increase in the funding of higher education would definitely fall into the excess category.