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North Dakota feels shutdown's effect

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GRAND FORKS -- North Dakota is among states where the economic impact of the federal government shutdown is likely to be hardest, according to a new analysis.

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WalletHub, a financial information firm, says North Dakota is the 17th most vulnerable state.

Part of the reason is the state is so reliant on Small Business Administration loans. On a per capita basis, North Dakota gets the most loans, the analysis says.

Minnesota, by contrast, is one of the least vulnerable states, ranking 48th.

The state is, however, ranked seventh for the most application for federal student aid per capita.

The most vulnerable states were, in this order, Virginia, Alaska and Alabama. The least vulnerable states were, in this order, Iowa, Indiana and New York.

WalletHub's analysis places the most weight on the number of federal workers per capita and federal contract dollars per capita. SBA loans were considered half as important as those two factors in calculating the vulnerability score.

Other factors had a quarter to a fifth as much weight, including student aid, real estate loans dependent on the Federal Housing Administration, Social Security payment per capita and the number of veterans per capita.

WalletHub's analysis does not provide data other than explaining what kind of data it uses.

A 2010 Gallup survey suggests why, despite the importance of the two large military bases in Grand Forks and Minot, North Dakota is not as vulnerable to federal furloughs: Only 4 percent of the state's population works for the federal government. Further, WalletHub's analysis appears not to factor in the exemption that allows active duty military members to continue to be paid.

For Minnesota, federal employees make up 2 percent of the work force.

The states with the most federal employees were much more dependent on the government. Of the Washington, D.C., workforce, 27 percent are federal employees. It's 14 percent in Maryland and 13 percent in Alaska, Virginia and Hawaii.

Federal contracts are not a big part of the North Dakota economy either. Firms in the state received $328.7 million in federal contracts in fiscal year 2011, the latest data available from FedSpending.org. That's $512 per resident. Among the biggest recipients are Noridian, also known as Blue Cross Blue Shield of North Dakota, and agribusinesses such as United Pulse Trading and Dakota Dry Bean.

Minnesota got $3.4 billion, or $691 per resident. Among the biggest recipients are defense firms such as BAE Systems, Alliant Techsystems and Lockheed Martin.

By contrast, the most vulnerable area, Washington, D.C., got $7.4 billion or $13,013 per resident. Virginia got $88.7 billion, or $12,537 per resident. And Alaska got $4.5 billion, or $7,177 per resident.

North Dakota stands out, though, for SBA loans. The agency reported that in fiscal year 2012, it was granted $97.5 million, or $152 per resident. In the first four months of the current fiscal year, the SBA provided twice as much financing compared with the same period in FY2012, or $35.6 million. Much of it was in the western part of the state where there is an oil boom.

In comparison, in Minnesota, which did not break the Top 10 for its reliance on SBA loans, the SBA lent $626 million in FY2012, or $127 per resident.

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