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September 22, 2005 Continued Loss of Income Due to Migration Between 1993 and 2004, people moving to North Dakota brought with them $5 billion in taxable income. People moving out of the state took with them $5.9 billion. Thus, during the last decade, North Dakota lost a total of $896.6 million in net taxable income as a direct result of migration. 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 from the past 12 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 and 2004, Grand Forks was hardest hit in terms of lost revenue due to migration with a net outflow of $238.3 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. “In fact, the negative consequence of the aftermath of the 1997 flood is very evident in the IRS data for North Dakota,” says Richard Rathge, Data Center director. “It resulted in heavy out-migration from the state for nearly three years, with net income losses jumping from $38.5 million between 1995 and 1996 to $163.6 million between 2000 and 2001. Losses of taxable income from the net exchange of movers declined every year since then, dropping back to levels similar to those prior to the flood.” Ward County had the second largest net outflow at $136.5 million. Two counties in the state experienced a net increase in taxable income due to migration during the past 12 years. Bottineau County had a net increase of $7.6 million in taxable income due to migration and Burleigh County had a net increase of $4.1 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 12 years, Cass County, the state’s largest population center, had a net growth of 4,889 tax filers. However, those tax filers leaving the county had higher incomes than those arriving. Therefore, even though Cass County gained tax filers, it lost $55.5 million in taxable income during that period due to migration. For information on methodology and limitations of these data, along with further discussion and additional tables, go to www.ndsu.edu/sdc/publications.htm#migration. The Web site contains “North Dakota County Migration Flows: 1998-99 to 2000-01," a North Dakota State Data Center report in PDF format. ### Source:
Richard Rathge, (701) 231-8621, richard.rathge@ndsu.edu
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North Dakota State University |
