Some people often deride North Dakota as being a state that’s far too dependent on the federal government for funding. In fact, I believe I’ve made that exact argument in years past. But something remarkable has happened. According to data from State Budget Solutions, North Dakota has gone from one of the states that are the most dependent on federal funding to the state that is the least dependent:
Backed by a booming economy, North Dakota is now the state with the lowest amount of federal support. In 2012, North Dakota was 45th overall and counted on the federal government for just under a quarter of its general revenue. The five spot improvement was only bested by New York, which moved seven spots to 34th overall.
North Dakota had the largest drop off in federal financial support from 2012 to 2013, 23.4%, falling to 19% of all general revenue, making it one of the lowest totals of any state in the last decade.
This is a far cry from North Dakota’s past, when it heavily relied on federal funding. In the early 2000s, the state was in or near the top 10, climbing as high as ninth in 2004, with 38.4% of its general revenue coming from the federal government.
North Dakota’s improvement is all the more impressive because it resulted from a nearly $1 billion increase in general revenue and a $200 million decrease in federal dollars from 2012 to 2013.
The state’s improvement in this regard probably won’t last long. As you can see from this graph prepared by Legislative Council, the amount of federal dollars in our state budget has been declining since the 2009-2011 biennium. That’s mostly due, I believe, to rising income levels reducing the amount of federal dollars flowing into the state for human service programs.
But it seems Governor Jack Dalrymple’s Executive Budget sees an increase of federal dollars in the state during the 2015-2017 biennium:
Generally speaking, the less dependent North Dakota is on federal dollars the better. Every dollar of federal funding the state accepts is a little bit of our local autonomy sold up the river. Federal dollars for things like transportation infrastructure – which are of a national interest – make sense. But federal dollars in other areas like social programs or education do more harm than good, I think.
I’d rather pay higher state taxes, and be as free as possible from federal meddling, than to bloat our state budget with federal dollars.