BISMARCK – A revised state revenue forecast supports significant investments in property tax relief and other priorities despite a downward adjustment in oil tax revenue, Gov. Kelly Armstrong said in information released Thursday.

“North Dakota homeowners being squeezed by high property taxes are demanding property tax relief and reform, and this revenue forecast confirms that we can afford to deliver the meaningful relief they deserve,” Armstrong said in a news release. “Thanks to our conservative approach to budgeting, even with a projected dip in oil tax revenues, we can still fund tax relief and other priorities such as workforce, housing, education, health care and infrastructure to continue making our state the best place to live, work and raise a family.”

Thursday’s revised forecast projects the 2025-27 biennium will bring in general fund revenues of $5.07 billion – a reduction of $105 million, or 2%, from the January 2025 executive forecast used to prepare Armstrong’s executive budget recommendation to the Legislature. Even with the change, the Armstrong executive budget would be projected to end the biennium with a $125 million positive ending fund balance.

General fund revenues in the 2025-27 biennium are expected to exceed the current 2023-25 biennium by $71.9 million, or 1.4%.

In comparison to the January 2025 executive forecast, the revised forecast predicts oil tax revenues will be $26.4 million less for the current biennium and $591.6 million less in 2025-27, due primarily to lower projected oil prices.

Forecasters trimmed $3 from the oil price in each year of the biennium, from $62 to $59 per barrel in the first year and from $60 to $57 per barrel in the second year. The oil production forecast remains unchanged, assuming production of 1.15 million barrels per day for 2026 and 1.1 million barrels per day for 2027.

The revised forecast also assumes a lower effective oil extraction tax rate, from 4.8% to 4%, due to nearly half of existing oil wells being exempt from the oil extraction tax because they are considered “stripper wells,” which produce below a specific level for at least one year. The level of production to qualify depends on the depth and location of the well. For Bakken or Three Forks wells, the threshold is a depth of more than 10,000 feet and less than 35 barrels per day.

Reduced oil tax collections would mean less money flowing into various funds, including the state’s Strategic Investment and Improvements Fund and the so-called “Prairie Dog” buckets that provide supplemental funding for municipal, county, township and airport infrastructure.

However, Armstrong noted the state budget still will include significant funding for infrastructure to build on the billions invested in recent biennia in roads, bridges, water projects, flood protection and other infrastructure.

The forecast released by the North Dakota Office of Management and Budget is based on the latest economic data and tax collection figures and broad input from industry representatives who serve on the state’s Advisory Council on Revenue Forecasting.

Armstrong noted even a $1 increase in actual oil prices above the forecast would add significantly to revenues and a budget surplus.

“This is a conservative forecast, and it needs to be, as North Dakota is a commodity-based economy and we must budget responsibly for the next two years,” Armstrong said in the release. “But this is not gloom and doom. Sales tax and individual income tax collections are forecast to increase, and oil production is expected to remain strong. This forecast should give legislators confidence to fund priorities, not the least of which is property tax relief.”

Democrats attributed the slower pace of state revenues to lower oil prices but also greater uncertainty from President Donald Trump’s trade wars.

“After mere weeks back in office, Donald Trump’s chaotic policies have thrown the public’s confidence in a strong economy into sudden disarray,” said Sen. Josh Boschee, D-Fargo, assistant minority leader. ” Retirement accounts are down, egg prices are up and middle class families are bearing the brunt. This is why North Dakota should invest in its people and their future. The Legislature can lower costs for families by investing in healthcare, affordable housing and no-cost school meals for all students, as well as expanding property tax relief.”

“While the revenue forecast is cautious, North Dakotans should be reassured that our state is still in a very healthy financial situation,” Senate Minority Leader Kathy Hogan, D-Fargo, said. “North Dakota can afford to invest in families and their futures, and that should be our priority when so many of our neighbors are struggling with the high cost of living.”