Armstrong proposes 3% local budget cap, $1,000 homestead credit and new recovery commissioner in State of the State

Governor Kelly Armstrong outlined a package of tax, criminal‑justice and behavioral‑health proposals in his State of the State address to a joint session of the North Dakota Legislature.

Armstrong said the top priority of the 69th Legislative Assembly should be property tax relief and reform, and he proposed capping future increases in local property‑tax budgets at 3% with unused portions carried over for up to five years. "Providing real property tax relief and real reform must be number 1 on our agenda," Armstrong said.

The governor proposed increasing the existing primary‑residence property‑tax credit from $500 to $1,000 and creating a primary‑residence classification so the relief would be automatic rather than a claimable credit. He said the initial cost to the general fund for the credit increase is $310,000,000 and that the plan would use a dedicated stream of Legacy Fund earnings to supplement the credit over time.

Armstrong described an automatic sharing mechanism tied to the Legacy Fund: once the fund's earnings stream exceeds $2,000 per year per homeowner, additional dollars would be split evenly between more relief and reducing the general fund cost. He framed the approach as intended to be "aggressive, durable, and responsible," saying it would work at commodity price scenarios he cited in his speech.

On behavioral health and criminal justice, Armstrong announced creation of a new cabinet position, commissioner of recovery and reentry. He named Jonathan Holfe, the former director of Recovery Reinvented and a person in long‑term recovery, to fill the post. "The goal of this job will be to operationalize the relationships between the legislature, DOCR, county jails, law enforcement, the judicial system, our tribal partners, addiction counsellors," Armstrong said.

Armstrong said the state's jails are overcrowded and that the administration will press both short‑term and long‑term solutions. He credited previously approved funding for a new Missouri River Correctional Center and a proposed women's correctional center and said any new beds from those projects would not be available until roughly 2030 at the earliest. He said the administration intends to announce a "tangible turnkey solution" to address overcrowding when it delivers its budget next week.

On economic policy, Armstrong reiterated support for agriculture, energy development and value‑added processing. He called for policies that would reduce gas flaring and expand pipeline infrastructure, and he highlighted plans to expand farm‑to‑school purchasing and increase funding for higher‑education challenge grants to $50,000,000 over two years.

Armstrong also said his administration signed an executive order dissolving five state boards or commissions that had not met in over a year and announced a task force to review the state's 154 boards and commissions, with recommendations due before the next legislative session.

The governor urged the Legislature to act quickly on his property‑tax proposal, saying it will be central to his executive budget and that the plan "creates Legacy Fund buy in" for homeowners. "This property tax plan will be the most significant difference in our executive budget we will deliver to you next week," he said.

Armstrong delivered the speech after ceremonial music and prayers; the joint session then received the governor and other officials and later was dissolved by motion.

Ending — Armstrong closed by saying he is "humbled and honored" to serve as governor and called on lawmakers to pursue policies to make North Dakota "the best place to live, work, and raise a family."