Joe Morrissette, OMB Director

State Budget Challenges in the Wake of the Coronavirus Pandemic

We are living through an unprecedented time that will forever be etched in our memories. It is a time of uncertainty and rapid change. The factors that cause us anxiety and concern in our personal lives ripple through our economy and cause uncertainty for business owners, employees, and all levels of government. It is, of course, an incredibly difficult time to predict the future and develop revenue forecasts for the upcoming biennium. We are, nonetheless, forced to develop a revenue forecast that is conservative and reasonable, as well as an executive budget plan that makes the best use of those resources, balances planned expenditures and revenues, funds essential government services, and invests in new initiatives that create efficiency and improve government services.

The budget challenges we face are significant, and not always easy to explain. There are many different factors that together create the challenge ahead for the 2021-23 biennium. Here are some answers to questions I am frequently asked that may add clarity to the budget challenges we face:

  • If the budget situation is so dire, why are we not seeing budget reductions for the current biennium? The legislative appropriation was based on a very conservative revenue forecast. Prior to the pandemic, the state was on pace to exceed this forecast by a significant margin. Through March 2020, eight months into the 2019-21 biennium, sales tax revenues exceeded the forecast by 9%. This gave us a sizeable cushion that has allowed us to weather some of the COVID-19 downturn. Although major sources of ongoing state revenues are expected to decline for fiscal year 2021, some revenue sources, such as gaming taxes, interest income, and legacy fund earnings, are expected to increase and offset decreases in other areas.
  • Oil price and production seems to have recovered, so why is the revenue forecast down for the 2021-23 biennium? Oil and gas tax revenue is expected to decline for 2021-23. Despite some recovery in price from the extreme lows experienced in early 2020, prices are expected to remain much lower than prior to the pandemic. The original forecast for 2019-21 was $4.9 billion, the revised forecast is $3.4 billion. For the 2021-23 biennium, oil and gas tax collections are estimated to be around $3 billion, roughly 60% of the original 2019-21 forecast and only 50% of the 2013-15 biennium peak.
  • What is the impact of COVID-19 on state revenues? There is no clear answer to this question. Our revenue forecast assumes the most severe impact from now through the first quarter of 2021, then a diminishing impact and an economic recovery beginning in the second quarter of 2021. This corresponds with an expectation that a vaccine will be widely available by the second quarter of 2021 and the impact of the virus will be mitigated. We expect sales and use taxes, our largest source of general fund revenue, to decline about 18% during fiscal year 2021 compared to 2020. Fiscal year 2021 declines are also expected in motor vehicle excise tax, due primarily to supply chain issues, and individual income tax, due to higher unemployment, lower self-employment income, and lower royalty income.
  • What is the cause of the budget gap for the 2021-23 biennium? There are varying estimates of the potential budget gap for the 2021-23 biennium. A recent Legislative Council memo identifies it as potentially $735 million. The reasons are manifold and include the projected decline in 2021-23 revenues. A significant factor requires a historical perspective on the state budget. Between the 2009-11 biennium and the 2013-15 biennium, state ongoing general fund revenues grew from $3 billion to $4.4 billion, an increase of almost 50% in just a 6-year period. Although those increases appeared to be on a continuing upward trajectory, declines in the oil and gas industry and other factors combined to reduce ongoing general fund revenues in the 2017-19 and 2019-21 biennium. Now, due to the pandemic, they are expected to be even lower during the 2021-23 biennium. For example, state general fund sale and use tax revenue peaked in 2015 at $1.3 billion. For fiscal year 2023, sales and use tax collections are expected to total $880, million, only 70% of the 2015 collections. For the last two budget periods, the resulting gap in general fund revenues has been filled by transferring available oil and gas tax revenues to the general fund. Due to the current oil and gas downturn, the revenues available to transfer will be significantly reduced.

With these challenges come the opportunity to look at what we do with a new focus on efficiency and continuous improvement. Although these budget challenges are significant, North Dakota is still in an enviable position, with an oil and gas industry that will recover and a diverse economy with many stable areas poised for growth. We are a state with strong reserve balances, including a fully funded budget stabilization fund and a Legacy fund that now tops $7 billion and continues to grow in perpetuity. We will meet these challenges with a budget that is balanced, focused on the reinvestment and reprioritization of existing resources, and invests in tools and processes that make us better and more efficient over time.


Workers Compensation Coverage Across State Lines

State agencies who have employees working in states other than North Dakota (telecommuting), must obtain workers’ compensation coverage in that state. WSI is unable to write coverage for employees that do not work in North Dakota. The Risk Management Workers Compensation Program coordinates the purchase of this required coverage for all state agencies.

As a state agency, and not an insurance company, WSI cannot write coverage for exposure outside the state. WSI may be able to provide limited coverage for North Dakota based employees for a period of not more than 30 consecutive days. See North Dakota Administrative Code § 92-01-02-22.

It is the responsibility of every state agency, whose business operation extends beyond 30 consecutive days into other jurisdictions, to comply with the workers’ compensation requirements of that jurisdiction. State agencies who do not ensure their compliance with the other states workers’ compensation requirements run the risk of being uninsured in another state. If a state agency is deemed uninsured in that other state, the financial repercussions and penalties could be substantial.

Risk Management notified state agencies on July 1 of the need to secure workers compensation coverage for employees working remotely in another state. As the employer, the state of ND must ensure that employees working in another state have workers compensation coverage. Agencies were asked to submit the employee information required to secure the needed out-of-state coverage. Surprisingly, many agencies reported employees that had been working in other states pre-pandemic for extended periods of time and were not previously reported to Risk Management. These employees were working without workers compensation coverage. Again, the cost of noncompliance premium, penalty, and interest fees can be substantial if the regulator of another state finds that coverage should have been secured.

More information can be found on OMB’s website or contact Risk Management at 701.328.7583.



Team ND recently kicked off training around change management and building our capability within the state of North Dakota. The Prosci ADKAR® Model is one of the most widely requested and sought-after models for change management. ADKAR stands for Awareness, Desire, Knowledge, Ability and Reinforcement. The model drives powerful results by supporting individual changes to achieve organizational success. The model offers a structured approach to ensure that each individual experiencing change moves through the five phases necessary to make overall change successful.

The recording for the initial training can be found here. Looking to expand your change management knowledge and start to put the principles into action? Here are several resources available through PeopleSoft:

  • Introduction to Change Management (class code 31778) – Covers the Prosci people-focused change management process. Explore how to manage the people side of change and the impact it can have for projects and initiatives.
  • Introduction to ADKAR (class code 31767) – Teaches learners how to use ADKAR to reduce their own anxiety and to help others through change.
  • Thriving Through Change (class code 31776) – Learn how to thrive during change and identify specific actions to be more successful in a changing environment.
  • Introduction to Leading Change (class code 31774) – Learn how to successfully lead through change and gain confidence during change.
PeopleSoft - OnBoarding

Onboarding was implemented on June 10, 2020 and is a streamlined process that replaces the paperwork previously completed for new hires. New hires, rehires, and transfers will be assigned the onboarding process in PeopleSoft on their start date. New employees will no longer need to complete a paper I9 form, fill out personal details data forms, designated medical provider forms, direct deposit forms and acknowledgements. Entering this information during the steps in onboarding will save agency HR and payroll staff time by simplifying the process for the new employee.

The changes made to the designated medical provider form also allows current employees the flexibility to access their designated medical provider form at any time so they can review and update within PeopleSoft as needed. The enhancements made to this form will save agencies time and allows for a central location for the signed forms to be maintained. It will also aid OMB Risk Management by providing a central location for completed forms. No more paper forms will need to be filled out by new or current employees.

A total of 604 state team members have either been through, or are currently going through, the new OnBoarding process.


PeopleSoft Travel and Expense Module

OMB is currently working on deploying the PeopleSoft Travel & Expense module for employee travel reimbursement. This module will allow employees to fill out their travel reimbursement on-line instead of using the paper form that most agencies use today. Reimbursement will no longer have to be entered in Accounts Payable to be paid. Training will be provided to agency accounting staff prior to rollout of the module, which is anticipated the end of this year.

Payroll Shared Services

OMB provides monthly payroll processing for some state agencies. Some of the services that OMB provides include entering payroll changes, performing time redistribution, monitoring leave and time approvals, and running monthly payroll reports. If your agency is interested in this service, please contact Jeff Larshus 701.328.4902 for more information.

National Budget & Financial Awards

The Government Finance Officers Association of the United States and Canada (GFOA) presented the state of North Dakota two significant awards in 2020:

  • State Budget Award - reflects the commitment of the governing body and staff to meeting the highest principles of governmental budgeting. To receive the budget award, North Dakota had to satisfy nationally recognized guidelines for effective budget presentation such as a policy document, financial plan, operations guide and communications device.
  • Certificate of Achievement for Excellence in Financial Reporting - for the comprehensive annual financial report (CAFR) for the fiscal year ending June 30, 2019. The Certificate of Achievement is the highest form or recognition in the area of governmental accounting and financial reporting. This is North Dakota’s 28th straight year receiving this award.



Many special events are scheduled throughout the capitol complex this fall and winter, including:

  • Veterans Day ceremony
  • Decorating the state Christmas tree
  • Governor’s official tree lighting ceremony; the Capitol tower window tree lighting will begin immediately after the Governor’s official tree lighting and end on December 31.

For detailed information concerning the date, time and location of these events, as well as all the events scheduled for this fall and coming legislative session, visit OMB’s website.


Multiple projects around the capitol grounds are in various stages of completion with all projects scheduled to be completed by December 21. The most visible of these projects is the redesign of the south entrance to the capitol. Other projects include:

  • Installation of touchless fixtures in all public restrooms
  • Installation of a new touchless slider door at the capitol’s west entrance
  • Installation of ionizers in all mechanical equipment
  • Redesign of the visitors’ parking lot


Information Technology Procurement Online Training

Does your agency purchase information technology (IT) services, hardware, software, or solutions? Information technology professionals, procurement officers, and mangers need to know requirements related to IT projects and IT Procurement. Now, you can learn more by enrolling in the Information Technology Online Procurement Training (Course #30382). This self-paced course provides an overview of the laws, standards, procedures, and needed approvals related to procurement of information technology. Enroll using PeopleSoft ELM. Agencies not using PeopleSoft can contact Kim Larson with the OMB State Procurement Office for assistance.

Information Technology is essential in enabling the State of North Dakota to meet the needs of its citizens. This training provides an overview of the requirements that apply to IT projects and IT procurement. NDIT must review and approve IT purchases over $25,000. Any IT projects $100,000 and over must include NDIT in the planning and study of the project, and there are required documents that agencies must complete. Projects valued at $500,000 and higher determined to be “Major IT Projects” are subject to laws that require collaboration between the purchasing agency, NDIT, and OMB, in consultation with the Office of the Attorney General. Major IT Projects also have an Executive Steering Committee (ESC) appointed to oversee the project. For Major IT Projects, the Procurement Officer and primary Project Manager for Major IT Projects must also meet minimum qualifications established by ND IT and OMB. Enroll in this online course to help understand the framework for planning and acquisition of IT solutions.

Get what you need: State sources for PPE and Telework Supplies!

The need for COVID-related supplies continues. Remember there are state sources of supply to help your agency!

Central Duplicating can help with your agency’s printing and mailing projects! Their graphic artist can assist with document design and incorporating logos into agency’s documents. Contact Ken Hamel at 701.328.3494 for an estimate.

State Surplus Property

Looking for furniture or equipment? OMB State Surplus Property is open to government entities, eligible donees, and the public by appointment. Call 701.328.9665 or email to schedule your visit. Visit State Surplus Online to see a list of available property. The public can bid on State and Federal Property through online auction. If State Surplus Property doesn’t have what you need, you can use the Want List to make a request, and OMB State Surplus Property will search available federal surplus property to try to find it. Need a filing cabinet? Check State Surplus. For government agencies and eligible donees, State Surplus currently has several good ATVs and ½ Ton 4WD pickups with low mileage.

When surplussing your items, contact Surplus Property if you need assistance with AssetWorks or to arrange a pick-up. Call 701 328-9665 or email.


ND Tourism