North Dakota – North Dakota’s latest revenue forecast reflects a downward adjustment in oil tax revenues but maintains support for property tax relief and other state priorities. Governor Kelly Armstrong emphasized that despite the decline, the state remains in a strong financial position to deliver tax relief and fund key initiatives.

The revised forecast projects $5.07 billion in general fund revenue for the 2025-27 biennium, a $105 million decrease from the initial January 2025 estimate. However, the state budget is still expected to close with a $125 million positive balance, ensuring funding for workforce development, housing, education, healthcare, and infrastructure.

While overall revenue remains stable, oil tax collections are expected to be lower than previously forecasted. The updated projections anticipate a $26.4 million decrease in oil tax revenue for the current biennium and a $591.6 million drop for 2025-27. This decline is attributed to lower expected oil prices, which have been adjusted down by $3 per barrel, and a reduced effective oil extraction tax rate. The new estimate assumes an oil price of $59 per barrel in the first year and $57 in the second.

A significant factor in the lower extraction tax rate is the increasing number of oil wells classified as “stripper wells,” which are exempt from the tax due to their reduced production levels. As a result, less oil tax revenue will be directed toward funds such as the Strategic Investment and Improvements Fund and the “Prairie Dog” program, which provides additional infrastructure funding for local governments.

Despite these changes, Armstrong reaffirmed North Dakota’s commitment to infrastructure investment. He pointed out that the state currently holds the top ranking for infrastructure in the nation, according to *U.S. News & World Report*, and has allocated billions in previous budget cycles for roads, bridges, water projects, and flood protection.

The updated forecast, released by the North Dakota Office of Management and Budget (OMB), was developed using the latest economic data, tax collection figures, and input from industry representatives. Armstrong also noted that a $1 increase in oil prices above the forecast could significantly boost state revenues and create a budget surplus.