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.