Staff previews major agency budget moves: higher education, human services, corrections and water resources

Legislative Council and OMB analysts gave the committee a high‑level preview of major agency budget themes in the Burgum executive budget and noted items that will require deeper review in division hearings.

Higher education: Staff said higher education general fund support shows a small net decrease from the current biennium overall but includes ongoing increases in some areas. The Burgum recommendation includes a $30.9 million general‑fund increase for student financial assistance and a recommended higher-education formula increase of $35.9 million; the executive also proposed a $30 million higher education challenge grant fund (Governor Armstrong signaled he may raise that to $50 million).

K‑12 education: The executive recommends an increase in total K‑12 funding; the state tuition fund (Common Schools Trust Fund distributions) is contributing a larger share to state school aid. Staff noted the executive proposes use of foundation aid stabilization funds and cited a proposed appropriation of $225 million from that fund in the Burgum plan.

Health and human services: The executive budget recommends about $6.1 billion in all‑funds for Human Services, with approximately $3.4 billion for Medicaid; staff noted an anticipated shift in federal matching rates (FMAP) and the end of enhanced COVID FMAP as enrollment and federal rules normalize.

Corrections: The Department of Corrections and Rehabilitation recommendation showed a 32.1% increase in general fund appropriations in the Burgum executive proposal, with items to note including $17.5 million for county jail overflow reimbursement and $127.3 million in one‑time SIF funding proposed for a new minimum‑security facility at Missouri River Correctional Center; staff said the executive also recommended 42 FTE additions across corrections projects.

Water resources: Staff flagged a large increase in carryover in the Water Resources Trust Fund and noted the program relies heavily on oil and gas allocations. Members discussed project carryover, construction capacity and how the state has moved to create a project stabilization fund to smooth large swings in project funding availability.

SIF, Legacy and other trust funds: Staff summarized SIF recommendations including transfers and proposed large one‑time appropriations to economic development, airports and other infrastructure; staff also summarized legacy fund earnings distributions and noted the recent constitutional change limiting available principal usage to 5% (down from 15%).

Staff said members will receive detailed agency presentations in division hearings and the second half of the session for human services and other large budgets.