North Dakota Surplus Prompts Additional Spending for Technology Based Economic Development (TBED) Initiatives

As governor of one of only a handful of states to project a surplus for the upcoming fiscal year, Gov. John Hoeven outlined additional funding for several initiatives supporting North Dakota’s TBED strategy in the FY 2009-11 biennium. Investments centered on diversifying the state’s economy through agricultural and energy research, 21st century workforce training, and higher education support in Science, Technology, Engineering and Mathematics (STEM) fields are prominent in the governor’s budget recommendations.

Anticipating growth in agricultural-based renewable energy development, Gov. Hoeven’s budget provides $25 million to augment existing programs and support new initiatives in agricultural R&D. This includes $11.5 million for the second phase of the Agricultural Research Greenhouse on the North Dakota State University campus ($4.5 million above the FY 2007-09 appropriation) and $2.9 million for additions and renovations to the state’s Agricultural Experiment Stations.

The governor’s budget for the Industrial Commission combines the biomass research incentive fund with the renewable energy development fund and authorizes $5 million from the general fund for biomass and renewable energy projects. Additionally, $1.4 million is included for the biofuels PACE program, a Bank of North Dakota program that buys down interest loans on biodiesel and ethanol production facilities, bringing its total to $5 million for the biennium. Another $2 million is included in the Commerce department budget for installation of biofuel blender pumps at fuel stations throughout the state.

Other energy-related economic development opportunities slated for funding in the governor’s budget include raising the cap on the Oil and Gas Research Fund from $3 million to $5 million, which will allow for more opportunities in horizontal drilling and tertiary oil recovery, according to the governor’s office, and further development of methods for carbon capture and sequestration.

Gov. Hoeven’s budget recommends $24 million for workforce development initiatives aimed at growing high-wage jobs in STEM fields and helping older workers re-train for jobs in the new economy. Specifically, the governor proposes $10 million for a STEM grant program, providing up to $2,000 per year for five years for students seeking a degree in a STEM field.

Within the North Dakota University System, the governor recommends $2 million for a student loan forgiveness program. Eligible students can receive up to $10,000 over five years to pay off student loans if they remain in the state and work in a STEM-related occupation. The budget also includes an $800,000 increase for EPSCoR research. The governor recommends an additional $1.2 million to expand broadband and cover the increased costs within the university system and an additional $100,000 ($400,000 total) for the North Dakota Space Grant Consortium.

To enable more entrepreneurs to participate in the Innovate ND program, a business competition providing funds for innovative start-up ideas, Gov. Hoeven is asking lawmakers to double the funding level ($200,000 total) in the next biennium.

The FY 2009-11 budget also maintains level funding of $20 million for the state’s Centers of Excellence Program.

North Dakota will begin the next fiscal year with $608 million in reserves and may see further growth in its reserve fund as a result of additional oil tax revenues generated during the next biennium.

Gov. Hoeven’s FY 2009-11 budget recommendation is available at: http://www.nd.gov/fiscal/docs/budget/execbudgetsummary2009-11.pdf.

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