Number of ND millionaires jumpsBISMARCK — The number of people reporting seven-figure incomes in oil-rich North Dakota nearly doubled last year and residents' average incomes rose 22 percent to an all-time high, boosted by the state's booming oil economy, state tax officials said.
By: James MacPherson, Associated Press, INFORUM
BISMARCK — The number of people reporting seven-figure incomes in oil-rich North Dakota nearly doubled last year and residents' average incomes rose 22 percent to an all-time high, boosted by the state's booming oil economy, state tax officials said.
"It was a really strong 2012, not only in oil but agriculture across the entire state," Deputy Tax Commissioner Ryan Rauschenberger said Wednesday.
Tax Department figures released to The Associated Press show a record 1,126 people reported incomes of more than $1 million on their 2012 individual tax returns, up from 634 in 2011. Only 339 so-called income millionaires reported incomes of more than $1 million in 2006, at the dawn of North Dakota's unprecedented oil boom.
Tax Department records show the average adjusted gross income in the state increased from $60,947 to $74,221 last year. The average adjusted gross income on 2006 returns was about $43,300. Rauschenberger said North Dakota has jumped from 38th in the nation in per capita personal income in 2006 to 6th highest in 2012.
The oil industry has helped boost wages throughout the state and created thousands of high-paying jobs, Rauschenberger said. North Dakota has gone from the nation's ninth-biggest oil producer in 2006 to the second, behind only Texas. The state has some 22,000 more jobs than takers and the lowest unemployment rate in the nation, at less than 3 percent. It also has an effect on other industries, including wholesale trade and manufacturing, he said.
"Oil has reached across the state and has had a positive impact," he said. "Jobs are being added and high-paying technical jobs are continuing to increase our income."
Rauschenberger said most of the people reporting seven-figure incomes are in North Dakota's 17 oil-producing counties. More than half of the oil royalties earned in those counties are paid to mineral owners who live outside of North Dakota and are not reported to the state for tax purposes, he said.
The number of tax returns jumped from 339,000 in 2006 to 440,090 last year. The total reported income has increased from $14.6 billion to $29 billion during those years. Total reported income increased about $7 billion from 2011 to 2012, according to Tax Department analyst Kathy Strombeck.
North Dakota is leading the nation in population growth and the number of residents in the state is at an all-time high, at more than 700,000 residents, according to the Census Bureau. North Dakota's strong economy led by its booming oil patch in the western part of the state has attracted thousands of new residents in the past few years, reversing a decades-long trend of population loss.
A healthy agriculture sector also contributed to higher incomes last year, he said.
"Prices and productivity were up in 2012 and the good weather played a huge part for agriculture," he said.
While a strong overall economy has helped boost incomes for the average North Dakotan, the increase in the number of people with million-dollar incomes comes largely from royalties paid to mineral owners by oil companies, Rauschenberger said.
About 90 percent of the drilling in western North Dakota occurs on private land and property owners often do not own the mineral rights to their land. To profit from oil production, a property owner also must own the land's mineral rights, which can be sold or leased to an energy developer.
Ron Ness, president of the North Dakota Petroleum Council, said the increasing number of income millionaires isn't the most earthshaking part of the state's envious economy.
"Millionaire numbers are what they are but the most striking thing is the job and career creation," said Ness, whose group represents hundreds of companies working in the state's oil patch. "You don't have to look far to see young people coming to the state or people returning to North Dakota for those opportunities."
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