Albany- While Gov. Andrew Cuomo is blaming recent changes in federal tax rules for driving some taxpayers out of the state, New York has seen more people moving out to other states than moving in for many years.
On Monday, the governor and Comptroller Thomas DiNapoli said a $2.3 billion drop in projected state tax revenue stemmed largely from changes the federal tax code by the administration of President Donald J. Trump that reduce deductability of state and local taxes on federal income tax returns.
Both men blamed that drop in personal income taxes in December and January on the federal tax changes, which limit the federal deduction for state and local taxes at $10,000. The governor likened it to a “an economic civil war that helps red states at the expense of blue states.”
While their statements did not explain how the federal changes were driving down state receipts, it is clear that people — who pay the taxes — were moving out of New York last year faster than people from other states moved in.
According to a survey by United Van Lines, the nation’s largest moving company, New York is part of migration trends in the Northeast and Midwest where people are leaving, while other parts of the country, including the South and mountain west, see a net influx of new residents.
Other states that are losing residents to the moving van include New Jersey, Connecticut, Massachusetts, Kansas, Illinois, Ohio, Montana, Michigan and Iowa, according to the survey, which the company has been doing since 1977.
According to United figures from 2015 to 2018, the company moved more than 19,500 households out of New York, while moving in about 11,400 households.
With the average household containing about 2.6 people, according to U.S. Census data, that meant United trips represented a net loss of about 21,300 residents, or about double the population of Watervliet.
“The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factor like job growth, lower costs of living, state budgetary challenges and more temperate climates,” said Michael Stoll, a consultant to United and a professor of public policy at the University of California/Los Angeles.
A similar survey by NorthAmerican Moving Services has similar results. For 2018, the survey found for every 55 households that moved from New York, 45 households moved in. That ratio was actually worse in 2015, when for every 38 households moving into the state, 62 households moved out.
Such departures are a longstanding part of the state’s history, according to a 2011 study by the Empire Center for New York State Policy, a conservative-leaning, Albany-based think tank.
That report found that since 1960, New York had lost about 7.3 million residents to other states. That was partially offset by the arrival of 4.8 million immigrants, for a net decline of about 2.5 million residents.
During the height of the exodus in the 1970s, New York was losing about 237,000 residents a year, the report found. Since the 1980s, that figure has averaged between 130,000 and 160,000 a year.
Study co-author E.J. McMahon said that the federal tax changes likely will encourage some higher-income New Yorkers to move, but it is unlikely that the entire $2.3 billion tax drop cited by the governor is a result of that.
McMahon said that an earlier state tax on high earners has encouraged some of those people to move, even before the federal tax changes took effect.
The real financial impact from the change likely won’t be known until later this spring, he said. “But no doubt, the (federal tax changes) will speed up out-migration from the state. But the whole $2.3 billion so far? I do not think so.”
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