Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Thursday, November 09, 2006

North Dakota Study Places Price Tag on Outmigration

Study Places a Price Tag on Outmigration

Research estimates a loss of nearly $1 billion in North Dakota’s net taxable income.

by Jon Bailey, Center for Rural Affairs, jonb@cfra.org

A new report from North Dakota shows that outmigration is not only bad for rural communities and their social and civic institutions, but it costs money. According to the North Dakota State Center, outmigration cost North Dakota nearly $1 billion in net taxable income from 1993 to 2005.

The report shows that people moving into North Dakota during the 13-year period brought about $1 billion less in net taxable income than the people leaving the state took to their new states of residence. During the period in question, North Dakota had a net outmigration of 44,000 people (people leaving the state minus people who moved into the state).

The income levels of people moving into the state also contributed to the decline in taxable income. In some of North Dakota’s largest population centers, an increase in population was accompanied with a loss in net taxable income, suggesting that those moving in had lower income levels than those moving out.

Only two of North Dakota’s 53 counties had increases in net taxable income during the 13-year period – one a small, rural county and the other the home of Bismarck, the state capitol.

This report not only places a price tag on outmigration that could be useful in demonstrating impacts on rural communities, but it also suggests that public policies and initiatives that seek to address outmigration in rural communities could have a net financial benefit to the community and to taxpayers. Significant outmigration in rural areas is eventually a cost to the society – infrastructure stills needs to be maintained and upgraded, institutions like schools still need funding, and the population left in many rural communities – often the very young, the very old, and the poor – need more services.

Rural outmigration renders communities less economically self-sufficient and places a greater burden on the rest of society to maintain the community. Investing in programs like the New Homestead Act and community development initiatives like HomeTown Competitiveness that have addressed rural outmigration as a goal may eventually prove to be a cost-effective response.

Rural communities are in need of public policy and local initiatives that work together to address the issues of outmigration and youth attraction. Society and taxpayers also need efficient responses to enhance the economic self-sufficiency of rural communities.

Solutions to these issues and needs exist – will and action are necessary to push them forward.

The coming 2007 Farm Bill debate provides an opportunity to demonstrate both. As rural issues are pushed to the forefront of legislative action during the 2007 Farm Bill debate, we will all have opportunities to reveal costs of the past and display potential rewards of the future.

Contact: Jon Bailey, jonb@cfra.org for more information.

Disagree? Agree? Contact Jon Bailey, jonb@cfra.org for more information, post a comment here or contact John Crabtree, johnc@cfra.org. Sign our Strengthening Rural America petition and join the National Rural Action Network, tens of thousands of rural voices standing up for rural America.

Center for Rural Affairs
Values. Worth. Action.

4 Comments:

  • At 11:06 PM, Anonymous Anonymous said…

    I do agree with Jon.
    I live in North Dakota and while I love it here and I was born and raised in North Dakota, I have to say there just isn't the opportunity here that there ought to be.
    There are some great benefits of living in ND. Great schools, low cost of living,low crime, friendly people, plenty of jobs.
    The plenty of jobs part is two-fold however. There are lots of them here but they don't pay well. Something really needs to happen here in ND. I know that we aren't unique and this is a problem all across rural America, but it is really hurting ND as Jon reported.
    Great article!

     
  • At 11:13 PM, Anonymous Anonymous said…

    I guess if you are going to have 2+ jobs just to survive, you may as well move out of ND to a warmer climate!

     
  • At 5:27 PM, Anonymous Anonymous said…

    I do not disagree with the underlying premise, but the numbers are highly misleading.

    If somebody takes a job in Mineapolis paying $50k, you can not say North Dakota lost the tax revenue of a $50k job if that same person could have only earned 35k in North Dakota.

    Again, I do agree that outmigration does cost tax revenue in addition to civic and social costs.

     
  • At 7:29 PM, Anonymous Anonymous said…

    the person who posted previously raises an interesting point, but i don't think that is what the report is saying, with a net loss of people comes a net loss in tax revenue that could be compounded by higher income individuals (say someone earning $50,000 in your example) moving out of North Dakota and their "outmigration" being masked by someone moving into North Dakota that earns less when they get there (say, $35,000 to use your example again).

     

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