Another month and another opportunity to see how fortunate North Dakota has been for these past few years, and how far off they are in the projections of revenues they have purchased.

First of all, concerning the revenues, even after some very large tax cuts put in place by the last legislative session and signed by the Governor, revenues are up by nearly 21 % compared to the same time as the last biennium.

Now that is just over 7 % of the projected amounts. Compared to what we thought we purchased some will say that is pretty good, at least compared to previous projections. However, as always, the devil is in the details, and I don’t think that is so good.

Sales taxes are off by less than 4 % and that is not bad. Auto purchases, or the revenues from them are off by less than 11 % and that isn’t bad either.

The other big categories are corporate and individual income taxes and they are off about 37 % and 42 %. That is, the revenues from these taxes are that much more than expected and yet the total revenue is only up about 7 %. That means that without those large amounts of extra revenue we would be in a deficit situation and that would be a critical situation, a very critical deficit situation. If the economy slows down with three fourths of the biennium left North Dakota will need its reserve revenues and the psychological effects of that will be very difficult on its economy.

I do not want to be the boy who cried wolf, but I think this proves again the critical need to get a better economic projection. We are, I think, living off our good fortune. We can not continue doing this, or so I think.

 

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