ND Veterans Affairs tells appropriators claims surge, seeks staff and operating funds

At an Appropriations - Human Resources Division budget hearing, Lonnie Wong, Commissioner of Veterans Affairs for North Dakota, told committee members the department is facing a marked increase in claims and is seeking additional staff and operating funds to meet rising workload.

Wong told the committee that "the claimant appeals are gonna eat up the most of this," and that two recent federal developments — the Blue Water Navy changes and the PACT Act — have sharply increased the number and complexity of claims coming to the state office. He said the office has moved to a model that relies heavily on county veteran service officers for frontline work and that contacts routed through county offices have increased.

The increase in claims, Wong said, is not just more issues per claim but more veterans coming forward. He estimated "at least 40% more people coming in" since federal outreach and recent law changes, and told lawmakers his office has not kept pace with that rise in workload.

Why it matters: committee members pressed for details on how the workload and funding interact because the department has reduced staffing since 2017 and relies on a mix of state general funds, federal program dollars and grant administrative fees to cover salaries and operating costs. Committee members noted the department had cut three positions in 2017, regained two, and is requesting one additional veterans benefit specialist to restore staffing to pre‑2017 levels.

Key budget items and program notes

- Staffing request: Wong said the agency seeks to restore a veterans benefit specialist position that the Senate did not fund. He described the position as needed because "the complexity of what our staff do is up quite a bit" and that restoring the third position would return the department to its 2015 staffing level. Wong said the office cut three positions in 2017, has since restored two and is requesting the third.

- Commissioner salary equity: The department and its oversight board sought a salary adjustment for the commissioner that the agency calculated at roughly a six‑figure level to fully implement the recommended increase; the Senate placed $25,000 in the bill for the increase. Wong told the committee the department and the state used HR and budget guidance to set the adjustment and that the $25,000 the Senate provided does not cover the full cost.

- Grants and operating funding: Wong described several federal funding streams the department uses: the State Approving Agency (SAA) work is 100% federally funded; the highly rural transportation grant provides several hundred thousand dollars annually to the department and the agency historically has taken up to 10% (and potentially up to 15% with future approvals) of grant expenditures for administrative costs that can be used for operating and staffing. He said the highly rural transportation program typically provides "about 4 to 500,000 a year" and that the 10% admin fee is not guaranteed and could disappear with federal changes.

- ARPA and one‑time projects: The department used ARPA funding for a one‑time scanning contract (about $100,000) to digitize records. Wong said the digitization vendor will finish most work this calendar year and that "we have less than 5,000 left" to scan; he asked the committee to allow carryover so the work can be completed.

- Cemetery and Fisher House grants: Wong described a veteran cemetery grant application that lists a total project amount of about $291,000 and requires a 10% local set‑aside for architectural fees; the department expects to use Melvin Norgard funds to meet that requirement (about $26,500). He said the Fisher House project received two separate legislative allocations of $500,000 each (one from ARPA/emergency session and another regular appropriation) for a total of $1 million, and that the federal site selection process is ongoing.

- Service dog program: Wong said the service dog program had an unspent balance remaining from pandemic‑era surpluses and that awards are limited by eligibility criteria; he described the program as showing meaningful outcomes for recipients but noted COVID slowed placements.

Federal risk and contingency planning

Committee members asked about possible federal VA staffing cuts and broader federal budget changes. Wong said recent federal actions included an early‑retirement/opt‑out round and that the VA had discussed returning staffing to 2019 levels, which could reduce roughly 80,000 positions nationwide; he said the VA indicated cuts would be "more surgical" and aimed away from employees who serve veterans directly, but acknowledged uncertainty. He said if a federal grant such as the highly rural transportation program were cut, the state office would "use as much ARPA as we have" and would inform the governor and legislature of impacts, but he did not promise state replacement funding for fully federally run programs.

Committee procedure and next steps

Committee members discussed the agency's budget presentation format, noting that agencies sometimes move operating money into salary lines to fully fund pay increases. Staff explained that the department used operating appropriations and grant administrative fees to offset salary shortfalls in previous years. Representative O'Brien was named by the chair to carry the department's budget in further committee work.

Ending: Wong said he will provide additional requested details, including square footage of rented space and further breakdowns of claims and individuals served, and the committee signaled interest in follow‑up site visits to several veteran‑related facilities.