Are People Leaving New Jersey in Droves?

New Jersey is one of two states selecting a Governor this year (Virginia being the other). Candidate Jack Ciattarelli recently received some online notice from a Politico reporter when Ciattarelli answered a question about New Jerseyans “packing up and leaving the state in droves.” What does the data say?

 It is true that the U.S. Census counted 9,288,994 in New Jersey as of April 1, 2020, an increase of about 497,000 since 2010. Percentage-wise that’s a 5.2 percent growth rate - under the U.S. average of 7.4 percent, but still growth. New Jersey also avoided the fate of neighboring New York whose 4.2 percent growth rate lost it a House seat.

Of course people have moved out of New Jersey, including the Politico reporter who took issue with the question in the first place. The IRS tracks address changes from year to year, and that data shows New Jersey regularly has more people (and their income) moving out of state than moving in: 604,000 people earning $44 billion in annual income have left the state over the last 27 years or so.

Between 2018 and 2019 (the most recent year of data available), the IRS reports that 94,740 tax returns earning $8.3 billion moved from another state to New Jersey, but 111,687 returns earning $11.4 billion moved out of the state. New Jersey gains on net from New York but loses overall, especially to Florida, Pennsylvania, North Carolina, California, and Texas. New Jersey has one of the highest rates of net outward migration in the country.

Another source of data is United Van Lines’s National Movers Study, which tracks its clients’ moves among the 48 contiguous states and compares the inbound moves versus the outbound moves. New Jersey ranks dead last, at 48th, with its proportion of outbound moves greatly exceeding inbound moves, alongside New York, Illinois, Connecticut, and California. States with the highest proportion of net inbound moves were Idaho, South Carolina, Oregon, South Dakota, and Arizona.

Although I work in tax policy, I am the first to admit that taxes are not the only thing that affect individual and business location decisions. Lots of factors impact those decisions, including presence of family and friends, salaries and job prospects, housing, transportation (including airports), educational quality, and the weather. But taxes, aside from being a major factor prospective migrants consider (especially now in the age of remote work), also impact many of the aforementioned factors as well. A state with a crushing tax system, or one with features especially harmful to job creation, can impact what jobs are available or what they pay, the quality of services provided, and whether the private sector will invest in a growing area or not.

You can certainly think outward migration doesn’t matter, and there can be an honest debate about what policies factor into those decisions (I co-wrote a law review article on the topic, check it out!). But it’s undeniable that the data shows that outward migration happens and that it seems to be happening much more in New Jersey (and other states with similarly high tax burdens) than in lower-tax states.