Bismarck — Governor Armstrong on Wednesday presented his executive budget recommendations for the 2025–27 biennium to the Joint Appropriations Committees, proposing a general fund of $6,600,000,000 and a total budget of $19,800,000,000.

The proposal pairs a $483,400,000 property tax relief and reform package with roughly $464,000,000 in bonding for construction projects, increased investments in housing and education, and immediate spending to staff an expanded correctional facility in Grand Forks.

The budget recommendation, Armstrong said, “includes historic property tax relief and reform, strategic investments in infrastructure and legacy projects, and solutions to housing affordability and access.” He told the committees the plan represents months of agency work and a rapid, three‑week review by his administration.

Why it matters: the package would change how legacy earnings are used, increase the percent‑of‑market‑value (POMV) calculation used to determine legacy distributions, and dedicate a new legacy earnings stream to property tax relief. The proposal also reallocates one‑time spending toward the Strategic Investments and Improvements Fund (SIF) and leaves an estimated $230,000,000 in general fund ending balance at the close of the biennium.

Key elements and figures

- Property tax relief and reform: $483,400,000 total, including a proposed property tax credit of $15.50 per primary residence in the next biennium funded with $310,000,000 from the general fund and $173,400,000 from a legacy earnings stream. The plan would cap local property tax budget increases at 3% per year with a five‑year banking option.

- Bonding and infrastructure: $464,000,000 proposed bonding package for projects including a new state hospital in Jamestown ($300,000,000 proposed), $120,000,000 for airport projects in Fargo, Grand Forks and Dickinson, and the state share of a military gallery at the North Dakota Heritage Center (state share discussed as part of the package).

- Corrections and immediate bed space: $16,100,000 to staff and operate the Grand Forks County Correctional Center expansion (making 90 beds available by July 1 of the current year) and $9,300,000 for temporary housing at the Missouri River Correctional Center (88 beds available by July 1, 2026), for a combined 178 additional beds.

- Education and children: $44,300,000 proposed to establish an education savings account program and a 2% annual increase in the K–12 integrated formula estimated at $60,000,000. Higher education funding rises roughly 9% overall, and challenge grants receive $15,000,000.

- Housing: Nearly $105,000,000 for housing availability and affordability programs (about $10,000,000 more than the prior administration). The budget proposes a new $50,000,000 commerce program called Housing for Opportunity, Mobility and Empowerment (HOME) intended to leverage local and private matches.

- Legacy fund methodology and transfers: the recommendation would increase the POMV applied to the legacy fund from 7% to 8.5% (the administration states that change would generate roughly $160,000,000 in the 2027–29 biennium under current assumptions), dedicate half of the incremental increase to bond repayment and the other half to the Legacy Earnings Highway Distribution Fund, and redirect a bottom stream (about $173,400,000) from its prior split to a new legacy property tax relief fund.

Budget priorities and tradeoffs

OMB Director Joe Morissette told committee members the Armstrong team reduced approximately $600,000,000 from the prior executive budget by trimming proposed FTEs and cutting one‑time general fund spending in favor of SIF where appropriate. “We took a really hard look at any additions and trimmed those back as best we could,” Morissette said. He noted the administration reduced proposed FTEs from the prior recommendation and restored a subset (35 positions) deemed highest priority, including corrections staff to operate the Grand Forks facility.

Morissette also described a policy change proposal to treat the Department of Financial Institutions more like an industry‑funded board (removing its appropriation and moving its funding mechanism), noting the budget book shows zeros in appropriation columns pending legislative action.

Questions from legislators and administration responses

Members pressed the administration on details and timing. Representative John Kapanek asked if highway projects were discussed for bonding; Morissette and the governor said highway projects were considered but the administration prioritized projects that lack other funding sources and proposed increasing ongoing legacy earnings to DOT rather than bonding additional highway projects. Representative Nelson pressed on the Jamestown hospital estimate, and the governor said cost estimates seen by the administration ranged widely; he urged prompt action to avoid higher costs from delay.

Senator Cleary asked for a detailed schedule showing the 122 FTE reductions and 35 additions; Morissette said the administration would provide the agency‑by‑agency breakdown. Senator Dwyer and others asked whether broader, across‑the‑board reductions (for example, 3% cuts) were considered; the governor responded that the short review period required careful, targeted decisions rather than blunt, across‑the‑board cuts.

Follow‑up and next steps

The administration said it will provide detailed “purple sheet” summaries of the Armstrong recommendations, comparable schedules to legislative staff, and further supporting detail upon request. No formal committee votes or binding actions occurred at this session; the hearing was a presentation and Q&A. The Joint Appropriations Committees will incorporate the executive recommendation into the Legislature’s budget process, where lawmakers may alter funding levels, bonding plans, and policy items such as legacy fund methodology and the proposed property tax credit.

Ending

The session concluded after roughly an hour and ten minutes of presentation and questions; the joint hearing was adjourned with committee chairs thanking the governor and OMB staff for the rapid review and materials provided.