Sales Tax Collections Fall In Minot Thanks To Slowing Oil Boom
Write this down, along with increasing hotel vacancies and other factors, as another sign that the North Dakota oil boom is quickly plateauing:
February brought a second straight month of a major fall-off in sales tax collections in Minot.
Sales tax revenue was down 38 percent again last month.
Minot City Finance Director Cindy Hemphill says if sales continue on this trend, changes may need to be made to this year’s budget.
Hemphill says the reason for the lower numbers cannot be pin pointed.
Flood recovery investments have slowed from last year, but she says building permits are still up.
She says another possible cause could be a slower pace in the oil fields — she’s expecting a change in that area in April when the weather changes and load restrictions are removed.
She says that if the sales tax revenue trend does not turn around by May, the city will take action reviewing the budget.
Remember earlier this year that statewide tax revenue forecasts were downgraded as well.
I’ve been writing for some time now that North Dakota may be facing a bit of an economic bubble, unavoidable I think because of the rapid economic growth in the state though exacerbated by state policies aimed at subsidizing housing and other types of development.
State leaders would be cautioned to tread lightly going forward. The expansion of government budgets has been swift in recent years, but exponential growth in revenues isn’t something the state can count on any more.