News Releases for August 2004
August 16, 2004
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Hoeven: State Revenue Projection Points To Healthy Economic Growth
BISMARCK, N.D. - Gov. John Hoeven today announced that North Dakota's latest revenue projections cap a series of positive measures pointing to healthy growth in the state's economy.
North Dakota should realize $50 million in additional revenues during the current biennium, and more then $100 million more in the next biennium, according to data provided by Economy.com, North Dakota's financial consulting firm, and the Office of Management and Budget. The figures are also based on input from the state's Revenue Advisory Council, which is composed of private sector industry representatives and legislators.
The preliminary revenue forecast by the Office of Management and Budget (OMB) for the 05-07 biennium tracked $102 million above the 2003 legislative forecast. The rise came largely from a $75.8 million increase in Sales and Use Tax revenues, and a $31.5 million increase in Individual Income Tax revenues.
"We're seeing healthy indicators like this because we're working aggressively and doing things differently," Hoeven said. "We are focused on creating higher paying jobs and new opportunities for North Dakota citizens by building a strong business climate. That translates into higher income and wages, and higher state revenues."
OMB Director Pam Sharp said, "The underlying condition at work here is an expanding state economy. Higher sales and individual income tax revenues reflect more working North Dakotans, higher wages and higher disposable income. It appears North Dakotans are making more and spending more."
Sharp said, in addition, that the new forecast reflects the fact that North Dakota's budget weathered the recession far better than other states, in part because of good fiscal management and holding the line on taxes.
The figures dovetail with recent data from the U.S. Bureau of Economic Analysis showing healthy growth in the state's income and wages. According to the federal agency, North Dakota led the nation in the rate of growth in per capita personal income, 8.8 percent in 2003, compared to 2.3 percent nationally. Growth was strong in agriculture, construction, manufacturing, transportation, information, education and health services.
In addition, North Dakota registered a 3.3 percent increase in average wages in 2002, the fifth highest gain in the country, according to figures from the U.S. Bureau of Labor Statistics (BLS) and Job Service North Dakota. That's more than twice the national rate of growth, and twice the rate of inflation. North Dakota also posted higher gains than Minnesota (2.4 percent) and South Dakota (3.0 percent).
In 2003, North Dakota posted a rate of growth in wages of 4.1 percent. That outpaced South Dakota (3.2 percent) and Minnesota (3.0 percent) by about a full percentage point. The national and regional rates of growth are not yet available for 2003.
Employment figures from the BLS show similar healthy growth compared to the nation and the region. Between 2001 and 2003, North Dakota gained 4,950 jobs, a 1.5 percent increase, compared to a 1.4 percent loss of jobs nationally. The Plains region posted a loss of 1.7 percent. Within the region, Minnesota lost 24,400 jobs, a 0.9 percent decrease, and South Dakota gained 500 jobs, an increase of 0.1 percent.
"The bottom line here is that North Dakota is gaining jobs, and wages and incomes are growing at rates faster than the nation and the region," Hoeven said. "We're seeing state revenues grow because our economic base is growing."
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