Outmigration Is Real And Won’t Solve Itself

There can be no denying that outmigration is real and it is not getting any better. Ignoring the problem and hoping it will go away as some like to do. Two recent reports quantified in no uncertain economic terms that there is indeed a problem.

First, the State Data Center issued a report detailing how even in Cass County where the population is growing at a quick rate, has been unable to recoup taxable lost because of people leaving. As a whole, the report indicates that the state has lost over a billion dollars in taxable income in the last 14 years.

Secondly, first quarter personal income growth numbers came in with North Dakota dead last. Not only dead last, but the ONLY state with personal income actually on the decline. There’s really no way to spin this.

So let’s review: 1) Personal Income is declining while the Gross State Product is increasing. 2) People who are leaving the state are making more than those entering the state.

What can be done?

1.) Admit there is a problem.
2.) Reduce the amount of lost income to taxation by allowing people to keep more of their money.
3.) Create incentives to entice young people to stay in North Dakota (income tax exemption for those under 30 years old).
4.) Eliminate hurdles and roadblocks to new business creation.
5.) Utilize Bank of North Dakota profits for low interest/high risk business loans specifically targeted towards college graduates with solid business plans.
6.) End the use of student loan profits as a general fund revenue source.
7.) Increase accountability for higher education cost increases; specifically student fees.
8.) Allow “amount paid” on student loans to be “banked” for later use as tax credits against state income tax liability in future years.

If these initiatives are not embraced, then the U.S. Census Bureau may be right when it predicts that North Dakota will lose another 30,000 people – or 5% of the state. Keep in mind they predict that they predict South Dakota (with no state income tax) to gain nearly 50,000 people.


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