Guest column: Why spending reform is necessary in North Dakota
"According to the data, North Dakota has spent more money than it collects in taxes every year beginning in 2023," writes Martha Njolomole.
Opinion byMartha Njolomole
Today at 8:00 AM
It may well be true that North Dakota voters want high government spending, as Rob Port claims in a recent newspaper opinion piece.
The state budget, however, is showing signs of strain, making reform necessary. This is the main message behind Center of the American Experiment’s newest report: From Boom to Balance.
According to the data, North Dakota has spent more money than it collects in taxes every year beginning in 2023. Based on the April 2026 budget forecast published by the Office of the Governor, general fund spending will exceed projected revenue by $784 million in the 2025-27 biennium. While balances brought forward more than cover this shortfall, the persistent structural imbalance signals that the state budget is on an unsustainable path.
Port rightly notes that North Dakota has become too reliant on oil and gas, which our report stresses as a serious risk to ongoing budget stability. But even after excluding oil and gas revenues, North Dakotans pay significantly higher taxes than neighboring South Dakotans.
Therefore, Port’s argument that tax hikes and relying on the right kind of taxes could fix this gap does not stand up to scrutiny. Not to mention, the state's economy has cooled down in recent years, making any tax hikes particularly risky for growth.
The federal government, which contributes over a third of the state's spending, is also racking up unprecedented levels of debt, which could mean less funding for states and heightened uncertainty.
Assuming North Dakotans can say yes to them, any tax increases that can accomplish these three goals simultaneously — close the deficit, reduce state reliance on oil and gas, and stave off the oncoming federal fiscal crunch — will likely prove too high and too damaging. Given the most recently passed property tax cuts, voter approval for these high taxes is highly unlikely.
True fiscal conservatives recognize that big government is a given and that deficits are rarely a revenue problem. For North Dakota, both points ring particularly true.
As American Experiment analysis has found, in inflation-adjusted per capita terms, the North Dakota state government spent 10% more in 2025 than in 2019. Combining state and local funds, North Dakota spent $15,955 per person in 2023, ranking ninth- highest nationally, and outspending South Dakota by 43%. Adjusted for the population living in poverty, North Dakota spent nearly twice as much on welfare or means-tested assistance programs per person as South Dakota.
North Dakotans should not treat fiscal bloat as inevitable, but as a series of choices that can, and should, be reversed. Policymakers need look no further than South Dakota for inspiration on how to make small government work.
Martha Njolomole is an economist with the Center of the America Experiment-North Dakota
