North Dakota Bankruptcies Up 17% In 2008

Just another indication that North Dakota hasn’t been as insulated from national economic trends as the tax-and-spenders among the state’s political leadership would have us believe.

BISMARCK, N.D. (AP) Bankruptcy court figures show Chapter 7 consumer bankruptcy filings in North Dakota increased 17 percent from 2007 to 2008, to 1,188.
Bismarck attorney Jim Coles says most problems stem from too much credit card debt and, often, medical expenses. He says many of the problems involve loss of a job, or illness or injury.

Add this to news that oil tax revenue in the state is projected to fall by 28% along with declines in sales and income tax revenues, and news from the Federal Reserve that personal incomes in the state are projected to decline 15.4%, and we’re left with a somewhat bleak picture.
Which isn’t to say that North Dakota’s economy isn’t perfectly healthy in a lot of ways. It is. But what we’re seeing is warning signs that things aren’t going to remain healthy, and that our political leaders should planning accordingly. The best way to offset potential economic slow downs is to unburden the economy with lower taxes and regulation.
Yet, down at the legislative session, there seems to be no hope at this point of getting any sort of significant tax relief passed at all. There is all sorts of spending being planned, unfortunately, and I don’t doubt that the Governor’s proposed 26% increase in state spending will be, at best, approved or, at worst, increased by the legislature. Which, if it happens, would come on top of a 24% increase in state spending from the last legislative session.
With every measure we have available to us indicating a slow down in the state’s economy, we simply cannot afford these spending increases. Political leaders like Governor Hoeven maintain that all will be ok, and that our state’s economy will keep growing. But the Governor also suffers from the delusion that all the massive investments of tax dollars in government-run economic development schemes are what’s been driving the state’s economic growth. And he’s wrong. We lucked into strong economic growth with expanded oil reserves being discovered in the western part of the state just in time for high oil prices over the last few years.
Which means that we don’t have a very diverse economy. If the oil prices don’t pick up again (and they might), tax revenues and incomes are going to be down across the state.