RCJ's John McLaughlin reports that the Black Hills economy, as measured by sales tax revenues, has been chugging along nicely over the last couple years.
I did move out here two years ago. You're welcome.
Figures on taxable sales for the first quarter of 2013 show strong growth in the Northern Hills but stagnant or declining economic activity to the south:
| Taxable Sales | 2012Q1 | 2013Q1 | Q1%chg |
| Belle Fourche | 22,500,396.19 | 24,089,579.60 | 7.1% |
| Spearfish | 65,138,682.94 | 69,254,351.49 | 6.3% |
| Sturgis | 22,810,365.60 | 24,331,885.58 | 6.7% |
| Deadwood | 15,189,911.22 | 15,383,365.24 | 1.3% |
| Lead/Central City | 9,964,353.11 | 9,967,043.95 | 0.0% |
| Rapid City | 568,044,557.54 | 571,311,058.51 | 0.6% |
| Hill City | 5,025,805.60 | 4,789,380.95 | -4.7% |
| Custer | 13,482,933.16 | 13,765,922.80 | 2.1% |
| Hot Springs | 11,858,595.30 | 11,291,805.34 | -4.8% |
| Black Hills cities total | 726,971,666.41 | 737,019,516.85 | 1.4% |
| Statewide | 4,416,848,780.08 | 4,554,965,832.78 | 3.1% |
| State minus BHC | 3,689,877,113.67 | 3,817,946,315.93 | 3.5% |
Cue Heidelberger's Yosemite Sam impression... which sounds very much like Bakken-frackin Bakken-frackin....
Hot Springs and Hill City are seeing less business so far this year. Rapid City's anemic 0.6% improvement over Q1 2012 leaves the eastern gateway to the Hills needing some serious summer tourism juice to catch up with their 6.7% annual increase in sales collections in 2012. At 1.3%, Deadwood sits right about at the average for the nine big Black Hills burgs. Custer beats the average at 2.1% (I welcome theories as to Custer's upswing).
The leading lights of current economic activity in the Hills are the three northern periphery cities, Sturgis, Spearfish, and Belle Fourche. Those three towns, the nearest sizable South Dakota outposts to the Bakken oil patch, together enjoyed double the statewide rate of growth in taxable sales during the first quarter of this year.
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Perhaps related: If Bakken income is boosting the Northern Hills economy, it's not trickling down as much to Deadwood's gambling industry. Gross gaming revenues dipped slightly in Q1 2013. The big resorts are making money, but Main Street casinos are shuttering and going up for sale. But hey: it was chilly all winter, so folks who just spent two weeks working outside in the barren North Dakota oil tundra probably preferred holing up in a hotel with cases of beer and poker chips instead of strolling door to door on Deadwood's lovely brick Main Street.
It's only gonna get better and better and better for us out here in Paha Sapa, Tovarishch.
At least when you hole up with a case of beer and play poker with your buddies the house doesn't take a cut..
You've got an $8.0 million increase in taxable income in the top three cities (representing about 2X the statewide % increase in taxable sales). So, you could assume just $4.0 million of the $8.0 million increase may be attributable to increased economic activity due to the fracking boom. But that also includes some portion of a multiplier effect. So, direct taxable income from the fracking boom might be more like $3.0 million. That's not a very big impact.
$3M-$4M isn't anything like the boom in North Dakota. We do need to keep our heads and not plan on any sort of gold-rush boom to solve our budget woes. Of course, if we got such a boom, we'd see new budget problems as we'd have to pay for more cops, roads, sewer, etc. Maybe this small but noticeable advantage is the sweet spot: just enough growth to cushion our city budgets, but not so much that we have to invest in enormous new infrastructure and services?