The shale gas boom presages a big increase in North Dakota’s fiscal policy scores, but that increase has not fully materialized yet, as the state is building up its rainy-day fund. Amazingly, mineral severance taxes brought in as much to state coffers in fiscal year 2012 as all taxes do to both state and local government in the average state, measured as a percentage of personal income.
North Dakota’s measured tax burden actually increased between FY 2011 and FY 2013, as state taxes, excluding mineral severance, rose from 5.6 percent of personal income to 6.6 percent, while local taxes fell from 3.0 percent to 2.8 percent of income. North Dakota looks fiscally quite centralized, which is unfortunate because North Dakotans do have substantial choice of local government: 1.9 per 100 square miles. Government debt and employment have declined substantially in recent years, while subsidies have declined but slightly.
Most Great Plains states have good regulatory policies, and North Dakota is no exception. Land use is lightly regulated, and the state has one of the strongest limits on eminent domain abuse in the country. The state has a right-to-work law and no state-level minimum wage. However, North Dakota has a monopoly state fund for workers’ compensation insurance. We show a big increase in health insurance mandated benefits between 2008 and 2010, but time will tell whether those mandates carry over to post-PPACA small-group plans. Our sources give a split judgment on the extent of occupational licensing in North Dakota, but nurses and physician assistants enjoy ample freedom of practice. The state moved from prior approval to “use and file” for automobile and homeowner’s insurance in 2013–14, a significant improvement. There is no CON law for hospitals, but there is a general “unfair sales” act. The civil liability system is one of the best in the country.
North Dakota’s criminal justice policies have improved over time, as the state has brought down its incarceration rate. However, nondrug victimless crime arrest rates are extremely high. The state still had a super-DOMA taking away gay citizens’ freedom of contract but will rise because of the Obergefell decision (see Appendix Table B17). The state’s civil asset forfeiture law is among the worst in the country, but local law enforcement rarely participates in equitable sharing. Smoking bans were intensified in 2011–12, but tobacco taxes are below average. With just a few exceptions, gun rights are strong in North Dakota, but we show that training requirements for carry licenses were increased in 2011–12. Alcohol freedom is generally good, but wine and spirits are available in grocery stores only when put into a separate enclosure. There has been no cannabis liberalization. Educational freedom is a big problem area for North Dakota. Private schools and homeschools are both more harshly regulated than anywhere else in the country. The state has no private school choice.