North Dakota Gov. Doug Burgum (R) has announced a plan to use excess fund balance from the 2019–2021 budget to provide two years of income tax relief and invest in the economic development of the state.
Under the governor's Accelerate North Dakota spending plan, approximately $207 million of the estimated $1.1 billion excess general fund balance will be used to provide an individual income tax credit of up to $500 per filed return for tax years 2021 and 2022, according to a September 30 release.
The plan also includes recommendations for investing the federal funds from the American Rescue Plan Act of 2021 (P.L. 117-2) to support growth, diversify the economy, enhance government service delivery, and create long-term savings for North Dakota residents.
“Between the pandemic, the economic slowdown that accompanied it, and the historic drought conditions that continue to cause real hardship for farmers, ranchers, and Main Streets, North Dakotans deserve a measure of relief,” Burgum said. “Thanks to sound planning and conservative fiscal management, the state can afford to provide this two-year income tax break to the hardworking citizens who kept our economy functioning through the pandemic.”
The governor also proposed investing $100 million of the excess funds to increase economic development and earmarking another $100 million to boost the state’s pension fund “to address the fund’s estimated $1.6 billion unfunded liability, which negatively affects local bond ratings and increases borrowing costs at all levels of government,” according to the release.
North Dakota residents are not the only ones who will benefit from income tax relief. In Colorado, residents are also poised to receive an income tax cut in 2022 because state revenue growth exceeded limits established by the state’s Taxpayer Bill of Rights.
Burgum’s office did not respond to a request for comment by press time.