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Published February 28, 2013, 03:35 PM

Oil-rich North Dakota 'well-positioned' for federal cuts

BISMARCK, N.D. (AP) — Oil-rich North Dakota is well positioned to weather automatic federal spending cuts if it is forced to do so, the state's top budget official said Thursday.

By: JAMES MacPHERSON,Associated Press, Associated Press

BISMARCK, N.D. (AP) — Oil-rich North Dakota is well positioned to weather automatic federal spending cuts if it is forced to do so, the state's top budget official said Thursday.

Republicans and Democrats in Congress and President Barack Obama are at odds over how to reduce the nation's debt by Friday, when $85 billion in across-the-board, automatic federal cuts would kick in. North Dakota may lose about $20 million in federal funding in fiscal 2013 if an agreement is not reached, said Pam Sharp, the state budget director.

As the debate intensifies in Washington, most states are bracing for the potential shortfall and scrambling to find funds to fill gaps. In North Dakota, Sharp said it's barely a concern.

"We'd experience minimal impact," she said.

Record oil production has made North Dakota the nation's No. 2 oil producer behind Texas. The state leads the nation in population growth, boasts the lowest unemployment rate in the nation and has thousands more jobs than takers. Oil revenues and skyrocketing sales and income taxes are injecting billions of dollars into the state treasury.

North Dakota, which has about $1.6 billion in budget reserves, is collecting more than $200 million per month in gross oil revenue alone — 10 times the amount the state could lose this year if the automatic cuts kick in, Sharp said.

"It wouldn't be that difficult to deal with," Sharp said of the potential federal cuts. "The Legislature certainly could take a look at it."

North Dakota lawmakers finished the first half of the 2013 Legislative session Thursday and are slated to resume work on Wednesday.

The state's oil boom has brought more work for the Legislature as they deal with massive spending demands.

To address that, Gov. Jack Dalrymple's nearly $13 billion budget plan presented to legislators keeps a healthy reserve but also raises state general fund spending by almost 18 percent over two years to address increased crime, beat-up roads, housing construction and infrastructure improvements that haven't kept pace with soaring oil production.

The Republican governor said in a statement that North Dakota is committed to sound fiscal management and urged the president and Congress to "get the nation's fiscal house in order."

"President Obama and members of Congress should be moving forward to implement cuts that are strategic and minimize the impact on public services." Dalrymple said. "That said, cuts are necessary to help reduce the federal government's over-spending ... we cannot continue to spend more than we take in."

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