(The Center Square) – North Dakota’s economic outlook is among the brightest in the nation despite its economic performance ranking in the bottom 15, a new report shows.
The American Legislative Exchange Council, a nonpartisan membership organization of state legislators, ranked states based on their economic performance over the last decade and for their forecasted economic outlook in the annual edition of its Rich States, Poor States report.
North Dakota has consistently received a higher score for its economic outlook in recent years, but its economic performance fell this year from 22nd to 37th, the report shows.
The report’s Economic performance metric looks at the last ten years from 2012 to 2022 and includes the state gross domestic product, absolute domestic migration, and non-farm payroll employment.
North Dakota’s state gross domestic product ranked 38th this year, a steep drop from 14th in last year’s report.
The state gained 7,682 residents in domestic migration from 2013 to 2022, though the entirety of those gains happened between 2013 to 2015. From that point on, North Dakota has lost residents every year, the report shows.
North Dakota’s non-farm payroll employment slipped to 47th, trending below the U.S. average.
On the flip side, North Dakota ranked in the top ten for its economic outlook, which takes into account state policy variables directly influenced by state lawmakers, the report said.
North Dakota’s top marginal personal income tax rate ranked 10th at 2.5% and its top marginal corporate income tax rate was 4.31%, the report found. Personal income tax progressivity, which is the change in tax liability per 1,000 of income, was $10.84.
The state’s sales tax burden received a middling ranking at $23.89 per $1,000 of personal income. Its property tax burden ranked 17th at $24.50 per $1,000 of personal income. The remaining tax burden was $15.65, the report said.
Recently legislated tax changes show a decrease of $6.57 per $1,000 of personal income. Debt service as a share of tax revenue was 6.01%, ranking 36th overall.
North Dakota performed well by not levying an estate/inheritance tax.
The state received its lowest economic outlook score for its number of public employees. North Dakota has a little over 633 public employees per 10,000 of its population.
North Dakota’s liability system survey, which looks at tort litigation treatment and judicial impartiality, ranked 6th.
North Dakota ranked first for its state minimum wage, which is the same as the federal floor of $7.25. It also ranked at the top for its average workers’ compensation costs, which was $0.58 per $100 of payroll. North Dakota also did well by being a right-to-work state, which gives workers the option to join or support a union.
