GOV. DOUG BuRGuM

Wilson was a speaker at Energy Day, held March 7 at the North Dakota State Capitol in Bismarck. Beyond the workforce, the event addressed community development, the economic impact of oil in North Dakota, world markets and state tax revenues.

Wilson told attendees drilling activity is expected to be high in 2017 — up to 85 wells per month. “Drilling activity is a huge driver of the need for oilfield services and employment,” he said.

Watford City, Belfield, Dickinson, Williston and Ross, all in North Dakota, will be adding significant jobs, Wilson said. “Just today, we have 75 openings. … As soon as we fill those, we’ll be adding more jobs.” Those positions include everything from truck drivers to office help, he said. “There’s going to be a significant amount of activity in 2017 and we need the workforce.”

The limiting factor is people in the sparsely populated state, he said. “We need to communicate how attractive North Dakota is. … We need to be better at telling the world what’s going on here.”

The improvement to the state’s infrastructure and ability to handle the oil industry’s presence has been substantial in the past few years, he said. “It was nightmarish for people who lived here and nightmarish for people trying to do business here,” Wilson said of the beginning of the state’s oil boom.

Jessie Veeder, a regional columnist, active Watford City community member and Energy Day speaker, noted the positive changes in her community, citing new schools, an increase in the number of young families and new facilities such as the Rough Rider Center, a community events center. She added that social media is important to get the word out about communities’ strong points. “We need to encourage people to make their homes here.”

Despite the downturn in oil, the energy industry is one of the biggest economic drivers in the state, said speaker Dean Bangsund, a research scientist for North Dakota State University. “It wields tremendous influence,” he said.

Energy Day was hosted by Bakken Backers, the National Federation of Independent Business and the North Dakota Petroleum Council. Gov. Doug Burgum made a brief appearance to introduce speaker Lt. Gov. Brent Sanford. “This is important work that’s going on here,” Burgum told attendees. “Energy has transformed us as a state.” He reminded the oil industry representatives and supporters in the room that it’s important to continue to increase infrastructure to increase outtake, while also increasing overall value. PB

Lisa Gibson EDITOR,

By Lisa Gibson

Valley City State University, in Valley City, North Dakota, is preparing to cut $2.4 million from its budget, on top of the $2.77 million it cut at the beginning of the current biennium. That’s more than $5 million and accounts for almost 20 percent of the university’s total budget. “Every time you cut, you hope it’s going to be the last cut,” says Greg Vanney, director of marketing and communications for VCSU. “The cuts get a little deeper each time. … This is going to hurt.”

Across the state, colleges and universities are slashing budgets, trying to comply with an expected 80 percent reduction to higher education funding for the 2017-19 biennium. New figures released March 10 show an even larger general fund deficit than expected for the current biennium, and as of March 31, it was unclear whether that would mean even more substantial cuts to higher education. The budget won’t be finalized until late April or early May, but the outlook is grim.

A simultaneous slump in agriculture and energy markets is the culprit, particularly low oil prices, says Pam Sharp, director of the North Dakota Office of Management and Budget. “That has taken not only oil revenue, but general fund revenue off the table as well, because it’s impacted the taxable sales purchases so much, and sales tax is our largest source of general fund revenue,” she says.

In the previous biennium (2015-17), VCSU cut less than $2 million, Vanney says.

Budget Breakdown

Elementary and secondary education, human services, and higher education are the three largest expenses in the state’s general fund budget, accounting for almost 80 percent, Sharp says. “Thats where the hits have to come from.”

The largest expense for human services is Medicaid, which, as an entitlement, can only be cut so far. Elementary and secondary education can be funded through the state’s Foundation Aid Stabilization Fund if necessary. But higher education has no backup. “You haven’t seen that cut in K-12 education because there’s been that other funding source to alleviate those cuts,” Sharp says. “But higher ed is a huge chunk of the pie and they don’t have that other source of funding like that Foundation Aid Stabilization fund.”

So while other agencies in health and human services sectors, among others, also are forced to make cuts, higher education is center stage. “A lot of agencies are cutting significantly, too,” Sharp says. “It’s just that higher education is such a large entity as a whole that it’s very, very noticeable and it’s very difficult for them to absorb those cuts without making major changes.”

Other states that rely on energy are suffering, too, but in North Dakota, higher education institutions are limited in their revenue options. The Legacy Fund, for instance, can’t be tapped for higher education funding. The state also has no plans for tax increases to benefit the sector and campuses are not permitted to bond for increased revenue.

Tuition increases, however, are permitted up to 3 percent per year and the state’s four-year universities are below the regional average, so there’s room to raise, says Mark Hagerott, North Dakota University System chancellor. It could help a bit, but the cuts to higher education in this budget are still unprecedented, and the expected 20 percent reduction to the state’s general fund is “radical,” Hagerott says. “This is not normal. This is definitely not something you want to do, but because of the way things are structured, it’s leading to a large cut in higher ed. It’s just the reality.”

Cutting Jobs

In traditional budget-reduction scenarios, common cuts would include early retirements, absorbing empty positions instead of rehiring, reducing administrative overhead, analyzing options for low-enrollment classes and increasing class sizes, Hagerott says. “But we’re past the early stuff,” he says. “It could come to closing programs. The cuts are so significant people are being laid off.”

At VCSU, with a fall 2016 enrollment of 1,452, terminating people and positions could be on the table, Vanney says. “When you start cutting jobs, that’s different. Those are the people you work with. That’s really hard. … I don’t think you can avoid thinking that that will happen. We want to do our best to accommodate those people transitioning to something else. We’re a very close-knit campus and we like to think of ourselves as a family so that’s a really hard concept here.”

VCSU’s budget cutting process has been transparent from the beginning, Vanney says, starting with gathering suggestions from the entire campus community, publication online of all suggestions and an open comment period on those suggestions starting in May, followed by an open meeting with VCSU President Tisa Mason. Vanney is on a special cabinet that will determine final budget cut recommendations to be submitted to NDUS and the North Dakota Office of Management and Budget. Once finalized, those budget cuts will be implemented by July 1, the start of the new fiscal biennium. “We know we’re going to have to cut things that are valuable to us,” Vanney says. “So we want to make sure everybody gets a voice in that.”

In a letter sent to the entire North Dakota State University campus in February, President Dean Bresciani says the campus is looking at a 15 to 20 percent overall reduction. “That reality requires us to consider options which previously would be unthinkable, but will now become necessary in deference to protecting our core academic and student success functions,” the letter reads. Athletics is being slashed by 40 percent, administrative areas are seeing 10 to 15 percent cuts and academics will take “substantial cuts of 10 percent or more,” he writes. Perhaps one of the most significant measures Bresciani has outlined is the elimination of senior administrative structure in the Division of Student Affairs and realignment of the department’s units to other campus divisions.

“The priority is to protect and sustain programs that are central to supporting our students, faculty and staff as they work and study at NDSU,” Sadie Rudolph, NDSU media relations coordinator, tells Prairie Business in an email. “We will maintain our focus on our core mission as a student-focused, land grant, research university.”

Maintaining Morale

With program and position cuts, morale among faculty, staff and students often falls. Vanney says VCSU’s transparency in its budgetcutting process helps keep morale a bit higher. “Having a good process goes a long way,” he says. “That doesn’t stem the pain when the time comes, but at least folks have had a chance to participate and think about things.”

VCSU actively will help any terminated employees find new work, he says. That means giving them full access to the school’s Career Services department and reaching out to find opportunities for them in the Valley City community. “We’ll make some calls and help people,” Vanney says. “Absolutely.” He adds that they’ll be treated professionally.

The university will also work to maintain programs for enrolled students. “We’ll own up to our responsibilities, in terms of if students are in a program, we’re going to try to make sure they’ll be able to finish that program,” Vanney says.

Areas of Growth

Despite a publicized 12 percent budget reduction, the University of North Dakota in Grand Forks will forge ahead with plans to create an institute for unmanned and autonomous research. The school is on the cutting edge and recognizes where new growth will occur, Hagerott says. “New things still have to happen. … UND realizes the world is not going to wait for North Dakota’s oil and corn prices to go up.”

Recognizing where that growth can occur and making expansions where possible likely will be part of every higher education institution’s budget evaluation process. It will be at VCSU, Vanney says. “Even though we’ve got to make some cuts, we’re going to come out on the other side and keep doing what we do to the best of our ability,” he says.

Sharp says North Dakota will have to settle into its new normal between the oil price extremes of $100 per barrel and about $20 per barrel. “We’re trying to find our way to figure out what the new $100-per-barrel norm is going to be,” she says, adding that West Texas Intermediate will need to hit $60 per barrel and stay there for a while to prompt significant and meaningful change to the state’s budget. “Our hope is that we’re at the bottom of the trough,” Sharp says. “But you never know where that is until after you’ve come out of it.”

Hagerott says, “We look at the glass as half full. We want to make ourselves bigger and stronger. We will work through it.” PB

Valley City State University junior Max Kollar, of Underwood, North Dakota, conducts synthetic biology research.

FARM LAND FOR SALE

Township 156 North, Range 67 West Section 13 N1/2NE1/4 Section 12 S1/2NE1/4 Section 12 SE1/4 Section 1 N1/2SE1/4, and Lots 8 and 9 TOWNER COUNTY – MAZA TOWNSHIP Township 157 North, Range 66 West Section 32 SE1/4SW1/4

Written bids must be placed in sealed envelopes with “Benson County Land Sale” on the face of the envelope. Bids must show a total dollar amount and not dollar per acre figure. Include name, address and phone number on bid. Bids must be mailed or dropped o at: Conroy Legal Services, PLLC PO Box 137 519 Main Street, Suite 10 Bottineau, ND 58318

AND received on or before Friday, April 28, 2017

The five (5) highest bidders will be notified by telephone from Conroy Legal Services, PLLC, on Monday, May 1, 2017.

At that time the bidders will be given an opportunity to verbally raise their bids.

TERMS: Successful bidder shall make payment of 10% of bid amount or $10,000.00 whichever is highest, as earnest money. Balance due in 30 days of the date an updated abstract of title is furnished.

Minerals to go with surface.

001559407r1 HIGHER EDUCATION PB

SELLER RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS, AND RESERVES THE RIGHT TO MODIFY BIDDING PROCEDURES. For further information or to request an information packet call Lisa or Kim at Conroy Legal Services, at (701) 228-2083.

IMAGE: VALLEY CITY STATE UNIVERSITY