Consider the incredible growth of this sleeping dragon. Over the first 10 years of the new millennium, it has seen export growth exceeding 300%, an average annual GDP growth rate of 6.7%, a per capita income increase of 58%, and 4.7% growth in its population. The dragon in question must be China, right? No, the red state I’m writing about is North Dakota.
Last year, North Dakota’s 7.1% GDP growth was the best in the nation, as was its unemployment of only 3.5% in August. At the start of the millennium, people were leaving the state to look for work. Now it is recruiting workers from neighboring states because there’s so much work to do. Much of this has to do with the oil and gas from the Bakken formation in the Williston Basin. But as Senator John Hoeven writes, “While some of the oil- and gas- producing counties in western North Dakota saw growth, Cass County, home to Fargo, in eastern North Dakota, saw more people moving in to live and work than all of the 17 oil- and gas-producing counties combined, a 22% increase over the decade.” It’s worth noting too, as Mr. Hoeven points out, that Alaska, which produces twice as much oil, and has the same population, has an unemployment rate of close to 8%.
This must be driving the Obama administration crazy. How else to explain why the U.S. attorney for North Dakota is taking seven oil and natural gas companies into federal court for killing 28 birds? Meanwhile, the bird kill rate of windmill states like California is better than a 12-gauge shot into a cage full of them. But there’s not even a peep about that from the Obama administration, and all the while taxpayer dollars are being burnt to a crisp by green dreams like Solyndra.
What Obama and blue-state politicians hate more is that North Dakota has a balanced budget and no general obligation debt, and at the same time has reduced income and property taxes. Jobs are up 15% over the decade in almost every sector. Job growth in science, technology, engineering, and mathematics from 2001–2010 grew by 27%, the fastest in the country. By way of comparison, Rhode Island, which is at the heart of the higher education mecca of New England, grew by only 5.8%. North Dakota ranks third in associate-degree-and-above educational attainment among 25- to 44-year-olds. It is fourth in college degree affordability and rated by AAA as America’s most affordable vacation state. If you want to check it out for yourself, swing by Fargo Beer Co. for a pint of Wood Chipper IPA. And don’t worry about being out too late—North Dakota is known as “America’s Friendliest State.”
In the “Ocean State” of Rhode Island, there are 400 miles of coastline that should be welcoming businesses from near and far. But earlier this year, Governor Lincoln Chafee chose to stifle growth by broadening the sales tax to deal with a $300-million budget shortfall. He recently stood next to the president to endorse No Child Left Behind down at the White House, a.k.a. campaign headquarters. As if under orders, he put on his marching shoes, and last week, through an unelected Board of Governors, he supported providing in-state tuition rates for illegal immigrants. As if there’s money to throw around to everyone.
Rhode Island is dealing with a record unfunded pension liability. General Treasurer Gina Raimondo was in Newport recently and had the following to say about the 401(k): “the 401(k) puts all the risk on the employees. Retirement is about security.” She’s expected to suggest a hybrid plan combining a pension with a 401(k). A simple way to invest your funds would be to consider your pension payment a bond at the state-guaranteed rate of return of 7.5% and invest the 401(k) in stocks. The real problem is the 7.5% expected rate of return set by the Retirement Board, which no quality bonds pay in the private sector. That guaranteed rate should be much, much lower. Raimondo said it would be reviewed on an annual basis. But it should be lowered now and tied to a fixed discount rate, not the market. She hopes the General Assembly passes her recommendation with an up/down vote. But Rhode Island State Senate President M. Teresa Paiva-Weed told the group in Newport that she’s never seen a legislative process “that did not result in changes to a bill as a result of public input.” I think she meant “union” input.
Government Makes All the Difference
North Dakota is a right-to-work state, meaning you can’t be forced to join a union against your will, and are protected by North Dakota Code Title 34, Chapter 1: 34-01-14. Rhode Island is not. Government union density, the percentage of registered union members as a proportion of all employees, is 17% in North Dakota and an astounding 64% in Rhode Island. There is no provision for government-sector collective bargaining in North Dakota. There is collective bargaining by police/fire, state, education, and municipal workers in Rhode Island under state law Title 36-11-1: Organization of State Employees. Binding arbitration in not allowed by government workers in North Dakota. Binding arbitration is allowed for Rhode Island police and fire by Title 36-11-9, and it was passed by the state Senate for teachers but not yet voted on by the House. North Dakota does not close public access to government bargaining sessions. Rhode Island can deny public access to government bargaining sessions through Rhode Island general laws 42-46-5(a)(2).
So if you’re looking for a cool place to spend your summers or to raise a family, North Dakota quickly comes to mind for a number of reasons. Chances are you’ll be able to keep more of your retirement money, or if you’re looking for work, to get a job. Rhode Island could be the rising sun of the east, but without changes to the laundry list above, it will be a long time coming.
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