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State official: North Dakota in 'mild recession'

By Dave Thompson

Bismarck, ND – North Dakota's economic growth is slowing down.State Budget Director Rod Backman says you could term it a mild recession, even though it doesn't fit the classic definition of two straight negative quarters. But Backman says the state budget has enough of a cushion to help it through.Backman says the analysis by the state's economic forecasting agency was done before the September 11th terrorist attacks.

"Consumer confidence is shaken across the whole country, as it is in North Dakota, too. So we're seeing some impact from that. The other thing that they're saying is that that confidence is coming back. So, if there aren't any major disasters or major problems, we should see that continue to improve."

Backman says tax collections are about two million dollars behind forecast. But he says if the present economy holds where it is, the state will still have 19-million dollars in the bank at the end of the biennium.

Meanwhile, a new study says North Dakota is already losing 26-million dollars in sales tax revenues due to sales on the Internet.

Backman says he thinks that 26-million dollar figure may be high -- especially since ealier estimates said the state was losing four-million dollars in sales tax revenues to Internet retailers.

"Regardless, the point is -- it is having an impact in North Dakota, whether the number is four million, or 26 million, or half way in between. That's a significant number for us."

The study -- published last month by the Institute for State Studies -- shows that figure could grow to more than 100-million dolllars in ten years. Backman says this is becoming an urgent issue.

"And I'm also confident that the National Governors' Association and the Congress are going to get this thing worked out so that there is a quick, easy method to collect the tax for the Internet retailers."

The study was done by two University of Tennessee professors .