For two decades, North Dakota has experienced remarkable growth. We’ve invested heavily in critical infrastructure, expanded behavioral health services, improved water systems and supported our communities in meaningful ways.
Much of that growth was necessary. But alongside it came a steady expansion in the size and cost of state government – growth that is no longer sustainable at its current pace.
Conservative budgeting isn’t pessimistic – it’s prudent.
We face a structural imbalance. Ongoing general fund expenditures are outpacing ongoing revenues. It’s not a crisis today, but it is a slow-building storm that threatens our future if we fail to act.
The responsible course is clear: We must balance the dollars coming in with the dollars going out. That was the message I delivered to our state agency leaders last week in presenting budget guidelines for the upcoming 2027–29 biennium.
The good news is that North Dakota is financially strong. Revenues are steady, our reserves are healthy, and our economy remains resilient and diverse. That didn’t happen by accident – it’s a credit to our citizens, our entrepreneurs and industries, and the dedicated state employees who keep government running effectively every day.
But strength today doesn’t guarantee stability tomorrow.
Recent events remind us how quickly circumstances can change with the volatility of oil prices. That’s why any short-term revenue gains from higher oil prices should be treated as temporary, not as a foundation for ongoing spending.
Our approach for next biennium reflects that reality. We’re asking agencies to hold the line: no new full-time positions, no new building projects, and any request for new ongoing spending must be matched with reductions elsewhere. For smaller agencies, that means holding budgets flat. For others, it means identifying responsible reductions ranging from 3% to 10%.
We’re not asking agencies to weaken their most effective programs. In fact, we’re asking the opposite: Take a hard look at what works, what doesn’t, and where taxpayer dollars can be better spent. After 20 years of budget growth, it’s time to evaluate – not just expand.
At the same time, we remain committed to supporting our current workforce. Fully funding existing positions and maintaining competitive salaries remains a priority. Right-sizing government is not about doing less; it’s about doing better with what we have.
I served in the Legislature in 2015. I remember the downturn in oil prices and the allotment process that followed, and I understand how painful reactive cuts can be. By identifying contingency reductions now, we can avoid scrambling later. We must prepare for the worst while hoping for the best.
Our long-term goal is to eliminate deficit spending in the general fund and restore balance between ongoing revenues and expenses by 2032. That won’t happen overnight, and it won’t happen without tough decisions. But the sooner we begin, the more manageable those decisions will be.
North Dakota’s future depends on getting this right. We can’t assume energy markets will always be in our favor or rely on one-time revenues to sustain ongoing commitments.
The path forward isn’t about cutting for the sake of cutting. It’s about building a state government that is efficient, effective and fiscally responsible.
Kelly Armstrong is the 34th governor of North Dakota.
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