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In North Dakota, a Rebirth of Gravel Roads

• "It's a lot uglier up here than people think," says the highway chief

A frequent indicator of development is a country's miles of paved roadways. By this measure, at least one corner of America is in reverse. Stutsman County, N.D., a 2,304-square-mile stretch of sparsely populated plains, maintains 233 miles of asphalt roads. The county road department says it can afford to care for just 48 miles, so it's starting to convert the pavement back to gravel.

Four times over the past 22 years, the county has tried to increase property taxes to pay for repairs to highways last paved decades ago. Each time, voters said no. In June, they'll be asked again to approve higher property and sales taxes to fix roads.

Stutsman County (pop. 22,241) doesn't seem especially troubled when compared with other parts of the U.S. Its jobless rate in February was 4%, down from 4.3% five years ago. In addition to wheat and soybean farms, it boasts Jamestown College, an airport (with two paved runways), and a Cargill malt plant. Great River Energy, which supplies electricity to rural locales, is building a power plant and a $300 million biofuels refinery. Money magazine ranked Jamestown, the county seat, among the 100 best small towns in 2007.

But Jamestown's sales tax is already 7% vs. 5% for the rest of the state, and county Highway Superintendent Mike Zimmerman thinks the latest tax hike effort will also fail. Regardless of the referendum's outcome, the county plans to grind up 10 miles of potholed roads this spring and summer to turn them into gravel. Other counties in North Dakota may do the same as they run short of cash. Financially, Zimmerman says, "It's a lot uglier up here than people think."

The bottom line: Stutsman County is America in miniature. Voters must choose between holding the line on taxes and holding on to services.

Arndt is editor of Bloomberg Businessweek's innovation and design coverage.

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