Anywhere but here in N.D.

Incentives: With the state's young people moving away to seek better opportunities, some officials want to offer money to those willing to stay.

May 26, 2002|By Scott Calvert | Scott Calvert,SUN NATIONAL STAFF

NORTHWOOD, N.D. - The Harvester Lounge is gone. Of the four hair salons, one is left. And the high school? Days before last week's graduation, students voted to merge future homecomings with erstwhile rival Hatton, perhaps inevitable since the football teams were combined two seasons ago.

Northwood's plummeting population, now about 960, seems likely to keep dropping. School Superintendent Craig Eraas fears that many of his 20 graduates - potential parents of future students - will end up out of state, where jobs are more plentiful and winters possibly less painful.

"I haven't got an answer," Eraas said on a frigid May morning as he prepared to grill hot dogs to mark the last day of classes.

Call it innovation or desperation, but some prominent North Dakotans have come up with a novel way to fight rural brain drain: by paying anyone younger than 30 as much as $2,000 a year just for staying in the state.

The money would be in the form of income tax credits and student loan forgiveness.

The problem is hardly unique to North Dakota, a monotonously beautiful place seven times larger than Maryland with a population roughly equal to Baltimore's.

Across the Great Plains, decades of mechanization and low crop prices have doomed small farms. That trend has fueled an exodus of well-educated youths.

But North Dakota, more rural than most of its neighbors, has fared worst. It grew least of any state in the 1990s, just 0.5 percent. The number of 20- to 34-year-olds fell by 16 percent, one reason the state has the nation's highest proportion of elderly over age 85.

The so-called Youth Investment Initiative is being pushed at the same time that Sen. Byron L. Dorgan, a North Dakota Democrat, is pitching a variation in Congress.

The Homestead Economic Opportunity Act would give financial perks to people living and working in rural areas.

Use of the tax code for social engineering is not new. But those on both sides of this debate say they know of no other state where a proposal such as the Youth Investment Initiative has received serious consideration.

Critics, including Gov. John Hoeven, call it folly. They say it could cost $37 million a year, or 5 percent of the state's general fund - money better spent creating jobs, especially in technology areas.

Moreover, they say, the money is too little to make a difference and simply won't work.

"When a young person graduates from college, do they say, `I'm going to look at my tax situation?'" said Hoeven, a Republican. "Our whole push is to create more jobs and better-paying jobs."

But its advocates, mostly Democrats led by Agriculture Commissioner Roger Johnson, say the money could tip the scale for young adults who want to stay but are tempted to go.

Maybe some would accept lower-paying jobs in Fargo, the logic goes, rather than chase bigger dollars in Minneapolis or Denver or Seattle.

Supporters say incentives would show the next generation that the state is willing to invest in them, literally.

"If this fails," said state Democratic Party Executive Director Vern Thompson, invoking a familiar phrase, "we might as well turn out the lights and leave."

Supporters are hoping to get enough signatures to put the plan on the ballot.

Hoeven favors targeted tax breaks such as those for rural teachers and points out that the state economy has perked up of late, adding 2,400 new jobs.

Ask him what the state needs, and he says more: more computer disk plants such as one run by Imation in Wahpeton, more factories that turn durum wheat and other crops into finished products such as pasta, more "back office" data-processing jobs for banks and insurance firms.

Shrinking small town

None of this has come to Northwood, 35 miles southwest of Grand Forks, a town dominated by two grain elevators.

It's the sort of place where men in pickups wave at strangers and people idle the engine when they pop into the Super Valu.

"We used to hope and dream our kids would be around," said resident Judy Korsmo. "We don't even think that anymore."

Her husband, Paul, and his brothers grow wheat, barley, soybeans and potatoes on 3,000 acres.

But the farm income is not enough, so Paul Korsmo drives a truck in winter. His wife teaches school in Grand Forks.

Judy Korsmo cannot blame her 22-year-old daughter, Melanie Simmons, for moving to St. Paul, Minn., where she runs a fitness center.

Winters might not be milder in the Twin Cities, but the abundance of jobs and vibrant city life are powerful draws.

A bonus of $2,000 a year - 54 cents an hour if applied to a year's worth of 40-hour work weeks - holds little appeal.

"I don't think I'd ever want to go back to North Dakota," Simmons said. "Job opportunities in my town are really, really nothing. I don't see a future there; that's really sad."

Northwood, though never bustling, used to be stable. For decades it was home to about 1,150 people and served the farms that stretched out as far as the eye could see.

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