BISMARCK, N.D. (AP) — Oil-rich North Dakota is blessed with a strong economy, but big hurdles still lie ahead, Gov. Jack Dalrymple said Tuesday.
Record oil production has made North Dakota the nation's No. 2 oil producer behind Texas. North Dakota, which has a state budget surplus of more than $1.6 billion, leads the nation in population growth, boasts the lowest unemployment rate in the nation and has thousands more jobs than takers.
"With the blessings of rapid economic growth come many challenges — challenges that far exceed what any city or county would normally encounter," the governor said in his State of the State speech to a joint session of the North Dakota Legislature on Tuesday as lawmakers began their 2013 session.
The economic prosperity and a record population of about 700,000 people has brought problems, including increased crime, beat-up roads and housing construction and infrastructure improvements that haven't kept pace.
Dalrymple told lawmakers that the state must address needs in law enforcement, infrastructure, housing, education and human services programs. But it also must be cautious of not letting spending get out of control, he said, which drew applause from lawmakers.
North Dakota was producing 460,000 barrels of oil daily when Dalrymple gave his first State of the State address two years ago. The number of barrels produced has risen to nearly 750,000 daily, and tax revenue from the oil is injecting millions monthly into the state treasury.
"Surplus funds have accumulated ... but we must resist the temptation to incorporate these funds into our baseline spending for ongoing programs," he said. "There are higher risks associated with any economy that is heavily dependent on the value of raw commodities and those risks must be carefully considered."
Dalrymple presented a $12.8 billion budget plan to legislators last month that keeps a healthy reserve but also raises state general fund spending by almost 18 percent over two years. The governor's proposed budget also gives a greater share of oil-tax revenue to western North Dakota's oil-producing counties, and nearly $1 billion for road work across the state.
The budget proposal also calls for 171 new state employees, including more law enforcement, court, health and regulatory workers to monitor the burgeoning oil industry. It also calls for more spending on health care, child care and education.
"Our great economic progress has given us an opportunity that is rarely available to any state, and that is the opportunity to create our own future," Dalrymple said. "In the end, I expect the Legislative Assembly will find that we can fund all of our priorities, build substantial financial reserves, and lower taxes as well."
Republicans have two-thirds control in both the North Dakota House and Senate.
Senate Democratic minority leader Mac Schneider of Grand Forks said he didn't "want to throw cold water" on the State of the State speech but he said Dalrymple's spending plan doesn't go far enough in addressing future needs of the state.
Dalrymple's 40-minute address, which largely focused on North Dakota's successes, drew several standing ovations from lawmakers and others in attendance at the Capitol.
"The time for high-fives is over," Schneider said.
The Legislature has been "playing catch-up" in trying to address North Dakota's exploding growth for at least two previous sessions, he said. Communities, especially those in the western part of the state, have had to come "hat in hand" requesting funding to keep up with rapid growth, he said.
A long-term plan and additional investments beyond the governor's proposal are needed "so we can prepare for life after oil," Schneider said.
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