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October 21, 2004 Continued Loss of Income Because of Migration Between 1993 and 2003, people moving to North Dakota brought with them $4.4 billion in taxable income. People moving out of the state during the same period took with them $5.3 billion. Thus, over the last decade, the net loss of taxable income to North Dakota as a result of the net exchange of movers totaled $851 million. This month’s “Economic Briefs,” 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 during the past 10 years. These records reveal a consistent loss of revenue to North Dakota as a direct result of migration. As North Dakota residents continue to leave the state, the economic consequences continue to add up. Millions of dollars in consumer spending and tax revenue are lost each year as a result of migration. Between 1993-94 and 2002-03, Grand Forks was hardest hit in terms of lost revenue because of migration, with a net out-flow of $234 million in taxable income. Much of this loss can be attributed to the devastation caused by the 1997 flood and the losses at the Grand Forks Air Force Base because of the missile wing closure. Ward County had the second largest net out-flow of $127 million. Only two counties in the state experienced a net increase in taxable income because of migration during the past 10 years: Bottineau County had a net increase of $1.1 million in taxable income from in-migration and Burleigh County had a net increase of $4.8 million. The economic impact of migration can be significant even in areas that have a net increase in tax filers, or net in-migration. During the past 10 years, Cass County, the state’s largest population center, had a net growth of 4,184 tax filers. However, those tax filers leaving the county had higher incomes than those arriving during that time. Therefore, even though Cass County gained tax filers, it lost $49 million in taxable income during that period because of the net exchange of movers. “There is an interesting trend in our state with respect to the net exchange due to migration,” says Richard Rathge, Data Center director. “On average, residents leaving rural counties tend to have lower incomes than those moving into rural areas. In many of the state’s urban counties, the reverse is true. Tax filers leaving the state’s larger urban counties tend to have higher incomes than the newly arriving tax filers.” For information on methodology and the limitations of these data, along with further discussion and additional tables, go to www.ndsu.nodak.edu/sdc/publications.htm#migration to obtain a copy of “North Dakota County Migration Flows: 1998-99 to 2000-01.” ### Source: Richard
Rathge, (701) 231-8621, richard.rathge@ndsu.nodak.edu
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