By Fergus Cullen – This article originally appeared in the Connecticut Post on October 8, 2009
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Over the last two decades, one in 10 Connecticut residents left the state. Of those who remain, 45 percent say they have considered moving out of state due to Connecticut’s high taxes.
There is something almost un-American about population decline. Our nation’s history is a story of a population that doubled every couple generations, expanded westward and extended its influence across the globe. The economy hums on 1 or 2 percent annual growth rates. Growth is foundational to American culture.
But for Connecticut, the story in recent decades is just the reverse, and out-migration is quietly but profoundly eroding Connecticut communities. Businesses grow more slowly and employ fewer people than they should. Homes have less value than they should. The state has less clout in Congress than it should, having lost a seat with the last national census.
“Last One Out Please Turn Off the Lights” is a new Yankee Institute study that examines population migration in and out of Connecticut, and looks at how migration impacts tax revenue.
We found that Connecticut lost a net of 325,000 people to other states since Connecticut adopted the income tax in 1991. That’s like losing a city the size of Waterbury three times. On average, nearly 20,000 people leave Connecticut each year. That’s like losing a Berlin, Darien, New Canaan or Southbury every year.
Where do your former neighbors live now? The top five states people from Connecticut moved to during these years are Florida (73,560), North Carolina (21,437), Georgia (15,265), Virginia (7,322) and South Carolina (4,358). We know this from studying IRS tax data.
Of course, some people have moved into the state during this time, too. The top five states people move into Connecticut from are New York (81,173), New Jersey (6,001), Rhode Island (1,637), Illinois (944) and Nebraska (298).
Babies are born, people pass away, and others emigrate to or from other countries, but of those who migrate among the states, many more people moved out than moved in during these years. The net result is that one in ten 10 moved out. The state’s population has literally been decimated.
Why should you care? Because when people leave, they take their incomes and purchasing power with them — and not just for one year, but for all future years, as well. We calculate that Connecticut lost $31.2 billion in net income and $3.5 billion in state and local tax revenue due to out-migration from 1995 to 2006.
But our communities lose something else, too. It’s hard to see people who aren’t here. These are the missing civic leaders, youth coaches, Rotarians and others who would be contributing to the social capital of Connecticut communities, but who are doing so in Tallahassee or Raleigh instead.
It’s hard to measure the cost of people living farther from family and friends in communities they used to live in, or the long-term loss to the state of children who might have started a business in Connecticut one day if their family hadn’t moved away when they were kids.
People strike out for perceived greener pastures when they think they can have a better job, higher standard of living, and greater quality of life somewhere else. Our study found that people who leave Connecticut relocate to states where the weather is warmer, taxes are lower, union membership is lower, population density is lower, and the cost of housing is lower.
We don’t think it’s a coincidence that the No. 1 destination state for former Connecticut residents is Florida, a state with no income tax and no inheritance tax. People respond to economic incentives, and they are voting with their feet and their moving vans.
Not all of these variables can be changed by policymakers; weather cannot be changed through legislative action. But other factors, such as taxes, can be changed in a way that would make Connecticut more attractive for people to stay or move into. If elected officials respond by continuing to raise taxes, one can only expect the steady exodus to continue. Last one out, please turn out the lights.
Fergus Cullen is Executive Director of the Yankee Institute, a Hartford think tank that advocates free market solutions to public policy issues. The full report is available at yankeeinstitute.org.