You'd never get a Minnesotan to acknowledge it, but there's a lot of North Dakota envy going around these days.
Here was an Aug. 19 headline on the New York Times website: "The North Dakota Miracle." And then, just three days later, this one, also on the Times site: "The Happiest States of America: North Dakota on the Rise."
Happiness is generally in short supply across much of the United States. Unless you're a hedge fund manager or the CEO of a Fortune 500 company, the widely reported assertion that the Great Recession officially "ended" two years ago seems a cruel joke. In most states, unemployment remains near historic highs, home values are low and state budgets are in disarray.
But in North Dakota the recession lasted about as long as a January thaw. Unemployment "soared" to 4.3 percent for a few months in 2009, before sinking back to 3.3 percent.
What makes this even more noteworthy is that the decline has occurred even as thousands of people are pouring into the state looking for work, and finding it. Nonfarm payrolls grew by 5 percent in the past year alone, also the biggest gain in the country and almost 17 times faster than payrolls grew in Minnesota.
Indeed, what's the occasional grasshopper swarm, or annual 100-year flood, compared with this litany of good news:
North Dakota's economy grew 7.1 percent in 2010, the fastest in the country. Only one other state, New York, saw gross domestic product increase by as much as 5 percent.
Personal income in North Dakota soared 6.9 percent during first three months of 2011. No other state saw personal incomes grow faster than 2.6 percent, and in Minnesota it climbed a meager 1.6 percent.
Household debt may be weighing down consumer spending everywhere, but North Dakotans have the second-lowest credit card debt and the smallest percentage of homeowners who are 60 days delinquent on their mortgage.
Home prices continue to fall in most states, but in North Dakota they are rising faster than just about anywhere else, even when so-called distressed sales are included in the calculation, according to the consulting firm CoreLogic. When distressed properties are excluded, home prices in North Dakota climbed 5.6 percent in June from a year earlier; in Minnesota they fell 6.8 percent.
Budget deficits, slashed services and higher taxes have been the norm across the country during the past three years as states scramble to make up for revenue shortfalls. Not in North Dakota. Investments in education, health and human services, the environment and transportation will boost total state spending by 12.5 percent, or $1.1 billion, during the next biennium.
Why, there's so much money sloshing around in North Dakota that they've even taken to bankrolling start-up companies in Minnesota. Three of the six companies that Arthur Ventures of Fargo has invested in are based in the Gopher State.
No doubt, some will seize on North Dakota's lower individual and income tax rates as proof that Minnesota needs to do the same in order to compete. But if that's all it took this column would be about South Dakota, which has no individual or corporate income taxes and usually appears at or near the top of most "business friendly" rankings.
Geology, not tax policy, explains North Dakota's incredible run. They've been drilling for oil in the Williston Basin since the early 1950s, but new horizontal drilling technologies have allowed prospectors to tap into the rich Bakken Formation. The U.S. Geological Survey estimates that the region holds about 4.3 billion barrels of recoverable reserves of oil, larger than all other current oil assessments in the lower 48 states.
North Dakota is now the fourth-largest oil producer in the United States. The number of people working in its oil industry has tripled since 2007, to more than 16,000, and the growth in jobs since then can be almost entirely accounted for by the state's oil industry.
According to the North Dakota Petroleum Council, crude oil taxes on production and extraction brought in about $750 million in state revenue. In addition, the industry spent $1.49 billion in taxable sales and purchases. The state tax department has said that "every $1 increase or decrease in the price of oil impacts gross state revenue by $9.3 million a year."
North Dakota is wisely salting some of this good fortune away, building budget reserves and a rainy day fund it can draw on if and when the good times end. That happened during the oil bust of the early 1980s and, briefly, in 2008, when hundreds of rigs went quiet in the wake of the financial crisis and lower oil prices.
Until or unless that happens, go ahead and chalk up North Dakota's good fortune to dumb luck.
Still, it sure beats no luck.