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February 3, 2011

6

Lincoln is now king of the hill — toppling my second hometown, Bismarck

by Deena Winter

Bismarck, North Dakota, is kind of like my second hometown. I went to college there, my parents and brother live there, my sister lives there, my favorite friend lives there, I started my journalism career there and held several positions in the newsroom there.

So when Bismarck is in the news, I notice. And Bismarck has been in the news a lot over the past few years, most often for having the lowest unemployment rate in the nation. My home state of North Dakota, in fact, made the news often during the Great Recession, because it seemed immune to the economic travails being experienced nearly everywhere else. According to the New York Times, it is the only state that didn’t have a budget shortfall in the past four years.

In fact, the state is expected to end the fiscal year with a $1 billion surplus. Lawmakers aren’t arguing over what to cut, they’re arguing over what to spend the money on.

Whenever I read about North Dakota’s huge cushion of cash, it brings back memories of sitting at a press conference in the state capitol about 10 years ago, listening to the Republicans warn that the state was headed for a huge budget deficit if it didn’t start cutting the budget and blah, blah, blah. They didn’t know then that the oil patch in western North Dakota was going to spring back to life in the already energy-rich state thanks to a lovely thing called the Bakken Formation — which stretches from Canada to my in-laws homeland in the Williston Basin to Montana and Wyoming. They’re saying this oil patch has 11 billion barrels of oil, which would make North Dakota the second-most prolific oil producing state.

Some believe there’s more oil in that thar shale than in Saudi Arabia.

My own hometown of Bowman, N.D., experienced an oil boom in the 1970s, and then an oil bust. But the oil rigs are back, and they’re drilling, baby. Unfortunately, I don’t own any land or mineral rights there.

The oil, and the fact that North Dakota — like Nebraska — never had a housing bubble, is the reason the recession seems to have skipped over the state.

So the news today that Lincoln’s jobless rate squeaked even lower than good ol’ Bismarck’s is incredibly good news indeed. One of my more critical readers asked why I didn’t write about that, and give Mayor Chris Beutler his due. I’m not sure Beutler has as much to do with the unemployment rate as the fact that Lincoln also has a stable housing market (no bubbles here) and is home to the state capitol and a major university, but, hey, who’s keeping track? Yay Lincoln!

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6 Comments Post a comment
  1. Midwest Crowing Company
    Feb 4 2011

    Nebraska has one of the Hghest Rates of Disqualification for Unemployment Insurance in the United States.
    Nebraska has one of the Hghest Rates of Disqualification for Unemployment Insurance in the United States.

    The laws developed by the business-liberal Legislature (corporate tax shelters, retail tax refunds) disqualify workers for so many things. When you are legilatively “disqualified “you are not counted as unmemployed. As a result our unemployment rate is low, a misleading statistic and Nebraska misses out in the apportioment of federal funds based on that costly low rate.

    It is like when many bemoan the brain drain and students leaving Nebraska. They never mention a key factor – low wages.
    In general Nebraska is a Low Wage State. Not very Worker concious or supportive.
    In the balance the business dominance shifts the tax burdens to individual taxpayers.

    Reply
  2. Roberta
    Feb 4 2011

    Maybe Bismark needs an arena to get them back on thier feet

    Reply
  3. Joe's Bro
    Feb 5 2011

    I guess it was Lincoln that sank the Bismarck.

    Reply
  4. Larry H. Wikoff
    Feb 8 2011

    Ms. Winter, interesting blog + articles/commentary. On the nearing billion dollar shortfall in our State budget, compared to the at least billion dollar surplus of N. Dakota’s state budget, you didnt mention them having the only State Bank in the nation, passed during the populist uprising of a hundred years or so ago during their depression. [ Which history tells us the leader of that farmers/workers revolt was Nebraska’s own William Jennings Bryan, 4 time candidate for prez and the plains states being the center of the then new and rising Peoples/Populist party,later fusing w/Democrats.] Out of that, N. Dakota populists won into law their own non-profit state bank, separate from the private and stock-holder owned Federal Reserve banking system. Anyway, as I understand it all state and local revenues collected are deposited in it and not the private for-profit banks and they create their own loans/credit, etc.. Has your research shown any connection there? Maybe that’s why N. Dakota of all the states has huge surplus? Of course the reason were not in deficit, is Nebr. constitution forbids it! Maybe we need a State Bank? Then, maybe at that time, we can re-build our aging infra-structure and transportation system and effectively fund highly needed social programs in time of great need and other essential services w/o soaring upward property taxes or gutting all aspects of the state budget. What do you think?

    Reply
    • Feb 8 2011

      Yes that is true the state owns a bank, as well as a state mill and elevator… certainly the Bank of North Dakota has generated some tidy profits for the state, but I believe the energy boom and stable housing are the main reasons. I will check around and see if anyone has tried to quantify it specifically.

      Reply
  5. Larry H. Wikoff
    Feb 8 2011

    Pardon my oversight in above comment, for the sentence that says “Of course the reason were not in deficit…..”, should say, “Of course the reason we can’t be in deficit….” Obviously, as earlier stated, Nebr. has deficit, which is against State Constitution, hence all the new tax and spending cut proposals and my proposal for a possible State Bank here, modeled after N. Dakotas. Or, at least maybe a research study by our [probably a more enlightened] Nebr. legislature. At least the state’s prohibition on a deficit, has kept us out of the need to borrow from profit hungry banks and then having to pay even more in interest interest. Like California and other states/localities, who find themselves having to even sell off assets in a down economy to payoff the, in many cases just interest to the creditors Of course when Nebr. regional/ local government entities float bonds for special projects, that’s exactly what were doing, paying alot of interest in addition to projects cost. A state-owned bank, by definition and law could/ would probably escape alot of that private/corporate profit taking from the puplic trough.

    Reply

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