Taxes are usually not a typical topic for a morning breakfast discussion. That didn't keep nearly 30 people from attending a talk led by North Dakota State Tax Commissioner Cory Fong in Williston Tuesday morning during the Williston Area Chamber of Commerce's "Sunnyside Breakfast."

Fong shared an overview of work done during the 2009 legislative session regarding tax issues and the impact of the state's tax policies.

Fong said the Tax Department collects just over 84 percent of the General Fund tax revenue in the state. The department collected roughly $2.288 billion of the $2.715 billion in General Fund revenues for the 2007-09 biennium.

Fong said there are three main sources of revenue for the state "which has been described as being like a three-legged stool." The three sources are sales taxes, income taxes and property taxes.

"While other states are struggling, we seem to be holding our own. One of the reasons I believe we're better able to weather this economic storm is because we have a good, balanced tax structure that promotes a good business climate," said Fong. Fong said one of the three legs, the property tax leg, has been getting a bit long in recent years. He said the Tax Department and legislators have worked during the past couple of legislative sessions to rein property taxes in a bit.

During the second quarter, meanwhile, revenues softened a bit.

"There were a lot of communities that were suffering from the flooding," said Fong.

He later added taxable sales and purchases also saw a slight drop. He said this is due to the flooding and the record numbers the state achieved in 2008. He said a decrease to a more stable level isn't surprising after 23 consecutive quarters of growth.

Overall, Fong said the legislative session this past spring was historic and led to a variety of big changes that should benefit North Dakotans and businesses.

One key action legislators took is to set aside large reserves from the budget surplus for the future. A total reserve of $702 million was set aside to hep with various funds.

A total of $325 million was placed in the Budget Stabilization Fund and $295 million was set aside for property tax relief for the 2011-13 budget period. The remaining $82 million was split between the Oil Tax Trust Fund and the Ending Fund Balance.

Fong said with the property tax relief, the $295 million was put aside so the property tax relief passed recently wouldn't need to be repealed if the state's economy floundered in the near future.

"They understood that this issue isn't going to be resolved overnight," said Fong.

Fong said putting such a large amount of money aside in good times helps in keep things going and gives the state a safety net for any economic retraction.

"We're able to provide a cushion for the future while other states are having to raise revenue and raid their trust funds or take out bonds," said Fong.

The overall amount of tax relief the state passed was $400 million, with $295 million in property tax relief. Fong said the Legislature capped school district's general fund levies at 110 mills.

He said the impact on local communities differs and depends upon any actions by local government. Fong predicts an average reduction of between 15 percent and 19 percent in the various school districts.

Another key legislative action was HB 1304, which deals with oil and gas tax allocations to oil and gas producing counties.

The legislation is set to increase allocations to oil-producing counties, cities and townships.

The legislation also removes caps set on counties and creates a County Infrastructure Fund for repairing roads and infrastructure impacted by oil activity.

Fong said incentives for new horizontal drilling, gas gathering, storing and capturing CO2 and various tax credits and expansions for wind energy also passed during the last session.

Fong added the strong business climate and steadily growing revenue has made North Dakota one of a few, if not the only state, that has avoided the economic problems seen elsewhere in the country.

"North Dakota has been doing well. We wouldn't have been able to do what we're doing if not for the solid principles, economics and hard work provided by our governor, legislators and everyone involved."

Previous roles for Fong include a stint as deputy commissioner for the Department of Commerce, director of Gov. John Hoeven's re-election campaign in 2004 and deputy director of the North Dakota Republican Party in 2000.

For more information on the Tax Department or for more tax information, visit www.nd.gov/tax/.