North Dakota’s budget basics

According to the National Association of State Budget Officers (NASBO), North Dakota’s total expenditures in fiscal year (FY) 2021 were $8.4 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, North Dakota’s combined state and local direct general expenditures were $9.1 billion in FY 2019 (the most recent year census data were available), or $11,953 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

North Dakota’s largest spending areas per capita were elementary and secondary education ($2,396) and public welfare ($2,050). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

North Dakota’s combined state and local general revenues were $11.2 billion in FY 2019, or $14,660 per capita. National per capita general revenues were $10,563. North Dakota uses all major state and local taxes. After federal transfers, North Dakota’s largest sources of per capita revenue from typical sources were general sales taxes ($1,736) and charges ($1,703), such as state university tuition and highway tolls. However, North Dakota’s largest source of per capita revenue in 2019 was severance taxes, which tax the extraction of natural resources such as oil and natural gas. North Dakota’s per capita severance tax revenue was $3,423 in 2019. Severance tax revenue is extremely volatile and can quickly rise and fall with the price and production of natural resources.

North Dakota’s politics

Governor Doug Burgum, a Republican, was elected in 2020 with 66 percent of the vote. The next gubernatorial election is in 2024.

Republicans control both the House of Representatives (80 Republicans to 14 Democrats) and Senate (40 Republicans to 7 Democrats), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in North Dakota. Members of both the House and Senate serve four-year terms. Roughly half the legislative seats are up for election in 2022, and the other half are up for election in 2024.

North Dakota’s budget institutions, rules, and constraints

North Dakota uses a biennial budget. North Dakota’s budget process does not include any tax and expenditure limits or limits on authorized debt and debt service.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

North Dakota’s current budget

Governor Burgum has not released a supplemental budget proposal (the state uses biennial budget) in 2022. He gave his state of the state address in February 2022.

North Dakota enacted its FY 2022-2023 biennial budget in May 2021. The enacted budget included $16.9 billion in total spending and $5 billion in general funds over the two years of the budget.

Under the American Rescue Plan, North Dakota will receive $1 billion in direct state fiscal aid and $189 million in local government aid from the federal government. As of January 2022, North Dakota had spent part of its ARP funds on economic development, education spending, capital construction, and public health programs.

According to NASBO, North Dakota’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2021: $2.3 billion/$8.4 billion

• FY 2020: $2.3 billion/$7.1 billion

• FY 2019: $2.2 billion/$6.4 billion

For more on North Dakota’s budget, see

• the North Dakota Office of Management and Budget,
• the North Dakota State Treasurer, and
• the North Dakota Legislative Branch.

North Dakota’s economic trends

North Dakota’s per capita income (per the Bureau of Economic Analysis) was $65,544 in 2021, ranking 13th among the states. It was above both the national average of $63,444 and the Plains regional average of $60,113. The state’s median household income (five-year estimate) was $65,315 in 2020, ranking 19th among the states and above the national average of $64,994. North Dakota’s poverty rate was 10.5 percent in 2020 (five-year estimate), below the national rate of 12.8 percent.

Although North Dakota’s averages tell a story about the entire state, North Dakota is composed of diverse localities. For example, the city of Grand Forks’s median household income was $50,194, and its poverty rate was 17.9 percent; the city of West Fargo’s median household income was $87,674, and its poverty rate was 6.5 percent.

North Dakota’s unemployment rate has historically been below the national average, particularly following the Great Recession, and in recent years it has been among the lowest in the country. (See how COVID-19 is affecting state employment and earnings data.)

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. However, North Dakota does not currently have enough information available for the Bureau of Labor Statistics to break down its unemployment rate by race. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)

The major industries that contributed the most to North Dakota’s gross domestic product (GDP) in 2020 were finance, government, social services (i.e. health and education), wholesale trade, and manufacturing. Wholesale trade contributed more to North Dakota’s GDP than it did to the nation’s and region’s GDP, while finance and manufacturing were less important to North Dakota than they were to the nation and region in 2020.

Looking at more specific industries, among those that accounted for at least one percent of North Dakota’s GDP in 2019, mining support produced far more for the state than for the nation, contributing 5.9 percent to North Dakota’s GDP and 0.3 percent to the nation’s. Other industries that overperformed in North Dakota relative to national averages in 2019 were farms, oil and gas extraction, wholesale trade, and construction.

North Dakota’s demographics

As of July 2020, North Dakota’s population was 765,309. That was up 13.5 percent from 2010. The state’s population growth rate was faster than than the nation’s 6.5 percent growth over the same period. The Urban Institute estimates the state’s population will increase 12.7 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.