South Dakota GDP up in 2009; Outperforming US Economy Since 1992

This week Governor Rounds cheered our solid GDP showing for 2009. South Dakota's economy grew 2.2% in a nationally dismal economic year. 38 states saw GDP decline in 2009; nationally, GDP declined 2.1%.

The growing GDP did not correspond with increases in sales tax revenue: Fiscal Year 2010, which ran from July 1, 2009, to June 30 of this year, saw South Dakota's taxable sales drop 1.5%.

Hmm: more GDP, more income per person, but less sales to tax. Could it be that an income tax would more accurately reflect the growing wealth and growing service needs of our state?

Expanding the historical perspective, South Dakota's economy has done fairly well over the last couple decades. Crunching numbers from the Census Bureau and from USGovernmentSpending.com, I find that since 1992, our state GDP per capita—i.e., the amount of economic activity divided by the number of people around to enjoy it—has grown at an annual rate of 4.8%. Compare that with our neighboring states:

GDP per capita:	SD	ND	MN	IA	NE	WY	MT	US
1992	21,005	20,295	25,611	22,042	23,848	28,434	18,162	24,869
1993	22,485	20,478	26,085	22,473	24,410	29,403	19,115	25,864
1994	23,968	22,358	28,070	24,797	26,829	29,622	19,957	27,217
1995	24,791	23,135	29,340	25,745	27,588	30,532	20,171	28,214
1996	26,576	25,653	31,387	27,671	29,743	32,811	20,668	29,554
1997	26,943	25,341	33,111	28,888	30,515	31,911	21,700	31,116
1998	28,706	26,742	34,691	29,289	31,219	30,591	22,852	32,539
1999	30,293	27,194	36,393	30,424	32,351	32,781	23,517	34,301
2000	31,771	28,462	38,194	31,858	33,404	34,511	23,945	35,268
2001	33,172	30,027	38,847	32,112	34,655	38,016	25,516	36,082
2002	36,184	32,228	40,111	33,639	35,504	38,737	26,128	36,978
2003	37,666	35,254	42,074	35,641	38,200	42,267	28,015	38,378
2004	39,505	36,673	44,754	39,435	39,958	46,315	30,093	40,498
2005	40,561	38,831	46,679	40,773	41,390	51,829	32,187	42,733
2006	41,154	40,938	47,785	41,937	43,482	59,906	34,089	44,873
2007	44,388	44,547	49,186	45,204	46,612	63,565	36,709	46,680
2008	46,970	48,714	50,573	47,456	48,317	72,383	37,057	47,446
2009	47,155	49,273	49,503	47,303	48,112	68,980	36,876	46,443
%incr	124%	143%	93%	115%	102%	143%	103%	87%
avg ann. incr	4.8%	5.2%	3.9%	4.5%	4.1%	5.2%	4.2%	3.7%

Annual State Gross Domestic Product per Capita, 1992–2009

In our neighborhood, only Wyoming and North Dakota have outperformed us in annual GDP per capita increase, and those two states have benefited from oil and coal. By this metric, all of us up here in the Northern Plains have outperformed the national average, with all but Minnesota more than doubling our wealth per capita since 1992. Nationally, per capita GDP has increased just 87%. Only in five years of the last 17—1995, 1997, and 2004 through 2006—has South Dakota's per capita GDP grown more slowly than the national average.