North Dakota residents' tax returns showed a 5 percent drop in average income in the 2020 tax year, largely due to the COVID-19 pandemic, the state Tax Department reported Tuesday.
Not only did the reported income drop last year for all North Dakota residents, but the number of filers also dropped. The reported gross income by North Dakotans dropped by 8.4 percent in 2020, while the number of filers also dropped by more than 18,000 from the previous year, according to figures provided to the Associated Press.
The average adjusted gross income in North Dakota also decreased nearly 5 percent, from $65,829 in 2019 to $62,696 last year.
According to Tax Department analyst Kathy Strombeck, the 5 percent drop in average income is not as bad as the state was predicting.
"Given the COVID-related shutdowns and the weeks of negative oil prices, a drop of 5 percent in average income per return is not nearly as bad as we anticipated," Strombeck said.
For more reporting from the Associated Press, see below.
North Dakota's oil industry has helped increase wages throughout the state and created hundreds of high-paying jobs for more than a decade. It also has an effect on other industries, including wholesale trade and manufacturing.
The numbers are still well above the pre-oil boom numbers a decade ago. In 2006, there were 339,000 filers, with an average adjusted gross income of about $43,300.
North Dakota has about 18,500 online job openings at present, according to Job Service North Dakota. Governor Doug Burgum and other state officials often say the actual number is closer to 30,000.
Although the state's economy has been hurt by the lack of workers, a growing population and rebounding oil prices have helped keep tax collections at near-record levels.
Oil prices are a key contributor to the wealth of North Dakota and the state's crude production has recovered somewhat from last summer's lows, but it's far from the record 1.5 million barrels per day produced in late 2019.
North Dakota's oil production was about 1.1 million barrels per day in September, the latest figures available.
Prices for North Dakota crude were 32 percent higher than the state's tax revenue forecast. The state's population is estimated to be a record 779,000, which would mean it has grown by 16 percent over the past decade.
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