North Dakota Lost 27,000 Taxpayers in 2016 and That’s a Really Big Deal

According to a report from the Associated Press, in 2016 the State of North Dakota lost some 27,000 taxpayers as reported gross income fell 7.6 percent.

That’s per figures from the Office of the Tax Commissioner.

Low commodity prices get the blame for North Dakota’s budget woes of late, and to be sure those prices factored into this departure of taxpayers from our state, but think about all of the commerce and tax revenues generated by this group of people. And remember, these are just the tax filers. This isn’t counting their children.

To put the number into perspective, 27,000 people would amount to a city just a bit larger than Williston and a little smaller than West Fargo.

That’s a lot of people who were earning wages and paying taxes (income, sales, etc.) who simply aren’t here any more.

It’s a big deal.

It’s also why North Dakota’s unemployment rate has stayed so low. You wouldn’t expect it, but the state’s unemployment rate has actually been trending down even as low oil prices and some tough years for the agriculture industry hurt the state’s economy. This chart is from North Dakota Workforce Intelligence:

You’re looking at an unemployment rate in September of this year that was under 2 percent. That’s too low.

North Dakota always has a chronic labor shortage, even in relatively meager economic times, because when people lose their jobs here they tend to leave. The reason why the unemployment rate rose a bit during the boom years of high oil and crop prices is probably because people without jobs stayed in the state on the understanding that there would probably be other opportunities.

When there isn’t hope for those opportunities they leave. Which, in turn, makes economic recovery difficult. How do you grow out of an economic malaise when you don’t have a workforce available?