State Budget Director Joe Morrissette
BISMARCK, N.D. (North Dakota Monitor) – North Dakota’s state workforce will shrink by 101 employees after a round of buyouts is completed, though some of the jobs will be refilled.
The state initiated an early separation program in February in the face of declining oil tax revenues, which accounts for about half of all state revenue. The state offered employees three months of wages and benefits if they leave state employment by Aug. 31.
Joe Morrissette, director of the Office of Management and Budget, said he would have liked to see more employees participate in the program, but that there is still potential for significant savings.
The state last did buyouts in 2018, with more than 200 employees accepting.
The state has just under 10,000 employees, which doesn’t include the North Dakota University System and its 11 colleges. Buyouts were not offered to campus employees.
Of the 101 approved buyouts, 50 are in the Department of Health and Human Services, the largest state agency, according to the state Office of Management and Budget.
Health and Human Services has more than 2,500 employees, more than double the next largest agency, the Department of Transportation.
The state Information Technology department, with 17, is the only other agency with more than five approved buyouts.
Morrissette said he hasn’t seen a full analysis for potential savings from all the agencies.
He said based on agency analysis on about half the buyouts, there is about $1.5 million in savings to the state, which accounts for refilling some positions and other potential changes. Based on that, Morrissette gave an early estimate of about $3 million in savings overall.
Morrissette said agencies will fill some of the positions, though likely at a lower salary.
Agencies were required to show there would be a savings by leaving the position open at least temporarily or filling the position with an employee who will be paid less.
There were 156 applications for the early separation agreements, but the state reserved the right to deny buyouts to employees. Some applicants withdrew.
Some agencies chose not to opt into the incentive program. There are 14 agencies that will be affected.
In April, Gov. Kelly Armstrong announced state budget guidelines that include a 10% budget cut for the state’s largest agencies and no new positions for 2027-29.
Morrissette said there will have to be some hires made in the next biennium. For example, the state plans to open a new women’s prison that will likely require more staff.
The state will likely see at least a temporary bump in oil taxes with the ongoing U.S. war with Iran that has disrupted oil supply and energy markets.
The state’s current budget was based on an oil price of $57 a barrel. Prices shot up in March with the start of the war but are just starting to show up in revenue collection reports.
With the conflict still unresolved, the higher oil prices should be reflected in higher state revenues for at least the next couple of months, Morrissette said.
“So that is helpful in the budget process. It’s definitely going to bring in more oil revenue than we had expected,” Morrissette said.
State agencies are in the process of establishing budgets for the next biennium, which the Legislature must approve in the 2027 session.
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