Connecticut had reason to hope that the small influx of people from other states between 2020 to 2021 was a sign of good things to come: 516 people on net gained and $40,036 Adjusted Gross Income (AGI) gained on net.
State lawmakers took the news as an encouraging sign of their governance with Gov. Ned Lamont touting during his 2024 State of the State Address, “Unlike our neighboring states which are losing population, Connecticut has gained population over the last few years.”
In the same address, he added, “Today we have more people working, more people starting businesses, more people joining labor unions with better pay and better benefits, more of our graduates staying in Connecticut, and more out-of-staters wanting to move here.”
Unfortunately, this is not the case as the previous influx seems short-lived. According to the latest IRS Tax Migration data, Connecticut lost 6,467 people and $1.06 million on net to 40 other states — the most to Florida — between 2021 and 2022. In only nine states did more people move to Connecticut than left, while one, Missouri, was neutral.
On net, the Constitution State saw an exodus of 9,966 people (or 38% of the population loss from all states) to the Sunshine State. Worse still, Connecticut’s former Florida-bound residents took $1.53 million with them.
Yet the state did gain population, but not enough to offset the losses. For instance, nearly 17,000 New Yorkers moved into Connecticut, which accounted for 86% of the total gains from the nine net-gainer states. These former New York residents brought with them an Adjusted Gross Income (AGI) of $1.49 million.
Meanwhile, Connecticut gained incomes from 13 states. Interestingly, only four of these net income states were states that it had gained population from — New York, New Jersey, Nebraska and Alaska. The second and third largest net population-sending states Rhode Island and Massachusetts gave Connecticut 2,323 new residents on net. But the 12,556 people moving in from Rhode Island and Massachusetts had a lower aggregate income than the 10,233 moving out.
The new data is, unfortunately, a return to form, echoing population woes Connecticut has endured for years. In March 2022, Yankee Institute reported that the state’s issues stemmed “almost entirely from a failure to attract enough residents, either from other states or abroad, to consistently replace the ones who leave.”
Taxes aren’t the only reason residents choose to stay or leave a state. But it is suggestive when the only states that sent over 400 people to Connecticut in each of the two time periods 2020-21 and 2021-22 were states with similarly high tax systems: New York, Massachusetts, Rhode Island and New Jersey. While the only states that received more than 400 people in both time periods were states with lower tax systems: Florida, North Carolina, Texas, South Carolina, Georgia, Pennsylvania and Maine.
If Connecticut wants to not only stem the tide of population loss, but start to increase in population, it must consider revamping its tax structure to keep residents within the state.
You can view the IRS Tax Migration data here.
