Outmigration Has Cost North Dakota $1 Billion Since 1993?
I guess, according to some study:
Since 1993, North Dakota has lost $1 billion in net taxable income as a direct result of migration. From 1993 through 2006, people moving to North Dakota brought with them $6.1 billion in taxable income, while people moving out of the state took with them $7.1 billion.
This month’s “Economic Brief,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on the analysis of federal individual income tax returns from the past 14 years. These records reveal that North Dakota has experienced a continued loss of taxable income as a direct result of migration.
First, I wouldn’t call this a “continued” loss of taxable income. This same study was conducted last year for the years 1993 – 2005 and that study showed that North Dakota “lost” $1 billion in taxes. So, as near as I can tell, even if you buy into this idea of “lost” tax income you still have to admit that we didn’t lose any ground over the last year. More evidence that the outmigration trend is reversing itself.
Second, last year the state already had a half billion dollar budget surplus (until the legislature spent it all, unfortunately). Clearly the state is already taking in more tax revenue than it needs. So what do we care about losing $1 billion over thirteen years? Big deal. The state has more tax revenue than it needs right now.
Third, the idea that people who left North Dakota took some of the state’s money with them is ridiculous on its face. Government collects money from citizens in exchange for performing certain functions (keeping up roads, running the court system, etc. That money belongs to the citizens, it does not belong to the government thus the government is not “losing” money when people leave. People are simply paying taxes elsewhere.
Fourth, all this hand-wringing over outmigration is silly. As I’ve posted before, it’s a self-correcting problem. Outmigration was caused by changes in North Dakota’s primary industry: agriculture. As new farming technology and methods have evolved over the last few decades farming North Dakota’s land has required fewer and fewer people. The people who were no longer needed in farming have had to move to other fields of work (and a lot of times other states as well) to find work to provide for themselves and their families. This is the genesis of the outmigration issue, and there’s not really a lot we can do about it. Certainly we aren’t going to roll back ag technology so that farming employs more people in the state, it’s just something we have to live with.
Over time, as more people leave, the labor force will shrink back down to a size where everyone can find the jobs they want here in North Dakota and outmigration will halt, and probably even reverse (as census data and even the study above seem to indicate). Something which probably comes as heresy to those who think that North Dakota needs to pass all sorts of laws and spend all sorts of tax money to counter outmigration, but it is the simple truth.
It’s not really anything we can fix and it isn’t really that big of a problem anyway.