(The Center Square) – New York lost more than $14.1 billion in state-adjusted gross income over a two-year period as residents fled to New Jersey, Florida and other low-tax states, according to newly released Internal Revenue Service data.
The data, based on income tax returns, shows New York lost more than 222,702 residents in the 2021 and 2022 calendar years driven by “domestic out-migration” of people moving to other states. The data shows the state lost more than $14.1 billion in taxable income during those two years.
An estimated 476,051 filers and their dependents moved to other states between 2021 and 2022, a slight drop of 2% from the previous year’s outmigration, according to the IRS data. This was offset by the 253,349 filers and dependents who moved into New York from other states in the same period – an increase of nearly 13% from the 2020-21 inflow.
New Jersey and Florida were the biggest beneficiaries of New York’s transplants. More than 88,344 people moved from New York to Florida, taking $9.5 billion. Another 79,883 New Yorkers moved to neighboring New Jersey, bringing about $6 billion in income with them.
New Yorkers also fled the state for Pennsylvania, Texas, North Carolina and Georgia, according to the data.
The exact loss of the state’s tax coffers is difficult to gauge because New Yorkers are taxed at variable rates depending on their income. New York City’s top earners are taxed at 14.776%, which includes the state’s 10.9% rate and the city’s 3.876% rate – the highest top-tier tax rate in the nation.
But the decline continues a trend that critics attribute to the state’s high cost of living, a pressing housing shortage and other issues that are prompting exits.
The latest U.S. Census estimates, released in May, shows New York outmigration of 216,778 between 2022 and 2023. Between 2020 and 2023 the state lost 482,257 residents, according to the data. Nowhere was the state’s outmigration more prevalent than in New York City. The nation’s largest city with a population of 8.2 million had a net loss of nearly 78,000 residents moving out of the city between 2022 and 2023.
Experts say the outmigration has less to do with politics than it does with a lack of housing, prevailing wages and access to employment.
However, federal data shows that the population decline has major implications for the states, revenue and tax collections.
Democratic Gov. Kathy Hochul has blamed a lack of housing as a primary reason New Yorkers are fleeing the state, making the case for expanding housing stock and making existing homes more affordable.
“People aren’t moving for warmer weather or lower taxes. They’re moving next door,” Hochul said in her State of the State address in January. “Three of the top five states New Yorkers are moving to share our borders and have similar taxes. People are earning in New York but living in New Jersey, Pennsylvania and Connecticut.”
Republicans say New York’s outmigration is being driven largely by the state’s highest-in-the-nation tax burden and a business sector that is struggling under excessive regulations, as well as rising labor costs.
Originally published by The Center Square. Republished with permission.
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