Connecticut has 6th highest outmigration rate in the country

Newly released estimates from the U.S. Census Bureau shows Connecticut’s outmigration rate is worsening compared to the rest of the country.

Connecticut’s net loss of population ranks sixth in the county for 2018. Just one year ago, Connecticut’s outmigration rate was eighth highest.

That’s according to figures analyzed by Donald Klepper-Smith, chief economist for Data Core Partners LLC and former chief economic advisor for the state of Connecticut.

Although the outmigration rate remained relatively unchanged, Connecticut still slipped two spots as other states lost fewer people than in 2017. Smith estimates that Connecticut is losing 414 people per week.

And that’s a conservative estimate.

There are actually two sets of Census Bureau data. The most publicized data set placed Connecticut’s net loss of residents at 29,515, but Smith used the more conservative estimate that placed the net loss at 21,509.

In total, since 2010 Connecticut has lost 175,930 residents to other states, according to Smith’s analysis. 

The reason for Connecticut’s outmigration trend has been the cause for much debate: some argue it is merely retirees setting out for warmer weather, while others argue it is Connecticut high cost of living and heavy tax burden combined with its poor economic performance over the past ten years.

The 2019 National Movers Study ranked Connecticut third in the country for people moving out. The top reason for moving was listed as job related, followed by retirement and “lifestyle.”

Either way, most people would agree that the outmigration trend has taken on political connotations with Republicans saying the moves are driven by increasing tax burden and Democrats, at times, denying there is any real issue to begin with or saying the state’s weather is blame.

Op-eds published in major state newspapers by often financially well-off residents who are moving out and giving their reasons have been met with more and more derision in the public sphere. 

Although the net loss of between 20,000 and 30,000 residents to other states may not seem like a massive loss in a state with 3.5 million residents, the earnings of those individuals leaving could affect Connecticut’s already-precarious financial situation.

Continued net outmigration has adversely affected Connecticut’s tax base in recent years… The new data also raises some interesting questions about what the 2019 data might look like given the state’s rising tax burden since then, and the less than favorable climate within the business industry.

Donald Klepper-Smith, Chief Economist, DataCore Partners LLC

“Continued net outmigration has adversely affected Connecticut’s tax base in recent years,” Smith said. “The new data also raises some interesting questions about what the 2019 data might look like given the state’s rising tax burden since then, and the less than favorable climate within the business industry.”

In 2015, Connecticut experienced a net loss of 20,000 people which constituted a net loss of $2.6 billion in adjusted gross income, according to figures released by the Internal Revenue Service. 

The IRS data showed the largest group of people leaving were those earning more than $200,000 per year. Other state studies have shown those migrating into the state earn less money than those moving out. 

Gov. Ned Lamont and the legislature recently closed a $3.7 billion budget gap through a combination of widening the sales tax base, maintaining a tax on hospitals and corporations and diverting funds from the Special Transportation Fund combined with growing income tax revenue. 

But Connecticut will face budget deficits over $1 billion per year from 2022 to 2024, according to the Office of Fiscal Analysis, which may set the stage for more tax increases in the future.

How that may affect migration patterns remains to be seen, but according to at least one survey the trend of people moving to other states is likely to continue.

A June 2019 survey conducted by Inform CT – a Connecticut-based research and policy institute – found that nearly half the respondents reported it was likely they would move out of state in the next five years. 

The creator and administrator for the Facebook page “People who are leaving or planning to leave Connecticut,” said that most of the postings on her page cited the state’s overall cost of living as the reason people were moving in a previous interview with Yankee Institute.

Membership in the Facebook group has grown from 864 in June to 5,364.

Florida remained the top destination for Connecticut residents in the Census data, followed by New York, Massachusetts, California and South Carolina.