North Dakota

The North Dakota 2019-2021 biennial budget began on July 1, 2019, and will end June 30, 2021. While the previous biennial budget included many spending cuts, the current budget has restored and increased funding in many areas, including education. This is part of a larger goal to create a more balanced, transparent budget without increasing taxes and restoring the reserves that were depleted during the 2017-2019 biennial.¹

$14.69 billion were allocated for the 2019-2021 biennial state budget ($4.84 billion from the general fund, and $9.85 billion from federal and special funds), an 8.8% increase from the previous biennial budget.² Of this budget, 17.9% was allocated to P-12 schools, and 20.4% was allocated for higher education. $2.10 billion went to K-12 education ($1.61 billion from the General Fund, and $487.8 million from the state special fund), and $3 billion went to Higher Education ($660.5 million from the General Fund, and $2.33 billion from state special funds). The per-pupil expenditure is $9,646 for fiscal year (FY) 2019, $9,839 for FY2020, and $1,036 for FY2021.

Funding priorities

Funding priorities for the North Dakota University System include $40 million for challenge grants (an initiative to match $1 of state money for every $2 privately donated) and $458.4 million for capital projects that were largely cut during the previous biennium.³ $11.1 million was allocated for extraordinary repairs under Tier I of the higher education funding formula. $90 million was also allocated for increased staff compensation in higher education; this compensation package would include a 2% salary increase in the first year of the biennium and a 2.5% increase the following year, as well as fully funded health insurance for employees.⁴

Funding priorities for the North Dakota Department of Public Instruction include grants for enrollment increases and mental health initiatives. Section 20 of SB 2265 allows for $3 million from the foundation aid stabilization fund to be allocated to the Department of Public Instruction to be used for rapid enrollment grants in P-12 schools.⁵ This one-time funding is used to address enrollment increases of at least 4% in North Dakota P-12 public schools. Section 20 of SB 2265 allocates $800,000 from the foundation aid stabilization fund to music education grants in North Dakota public schools for grades Kindergarten to Grade 5.⁶ This grant is part of a larger effort to improve mental health outcomes in North Dakota students.

Funding formula

North Dakota transitioned to performance-based funding in 2013 (SB 2200). The funding formula provides a fixed rate per completed student credit hour to each institution for their operations. The per student credit hour rate is different based on the type of institution.

The funding formula for the North Dakota University System is currently undergoing review, and so far, two changes have been made to the formula: $10.7 million is now appropriated for ongoing funding of the Healthcare Workforce Initiative (this was previously one-time funding), and the weighted factor for legal studies has been adjusted from 10.5 to 14.0.⁷

State issues affecting p-12/higher education funding

While education funding was cut during the 2017-2019 biennial, funding has increased in the current budget after Governor Doug Burgum initiated "strategy reviews" with 57 state agencies to scale back on expenditures.⁸ This has benefited the North Dakota University System and the North Dakota Department of Public Instruction, as funding for both of these agencies is a priority for the state.

In North Dakota, workforce recruitment and retention are the greatest barriers to economic growth.⁹ Emphasis in this biennial budget has been placed on education funding. $10.7 million has been allocated towards the Healthcare Workforce Initiative to increase the healthcare workforce in North Dakota.

North Dakota has also prioritized behavioral health in the biennial budget, and has allocated $800,000 from the foundation aid stabilization fund to the Department of Public Instruction to be used for music education grants for 10 students Kindergarten to Grade 5.^10...