Interactive Map: IRS Data Shows New Jersey Loses Out In Relocation Game

Colleen O'Dea | January 18, 2019 | Map of the Week, Maps
Mining the returns of those who have moved in and moved out, a report by the federal taxman pegs the Garden State as a net population loser

New Jersey Republicans and others seeking to bolster their complaints about residents moving out of state have frequently cited one moving company’s study. They’d do better to look at a much larger data set: The Internal Revenue Services’ Statistics of Income Migration Data, which in showing how New Jerseyans moved into, out of and around the state, pegs the Garden State as a population loser.

An NJ Spotlight analysis of the most recent IRS data, tracking the movement of federal income-tax filers between 2015 and 2016, found that New Jersey lost a net of nearly 27,000 households in that time, representing about 47,000 individuals. These households had an adjusted gross income of $3.5 billion, or about $131,000 apiece.

The IRS compiles the data by comparing the address on each tax filer’s return from one year to the next. The data set represents between 95 percent and 98 percent of all returns filed, but does not include those who filed after September 30 each year. It also does not represent the entirety of state households because it does not account for those who do not have to file an income-tax return, typically those who are poor or elderly. Still, the SOI migration report is one of the few reliable sources of such data available.

From 2015 to 2016, according to the IRS, about 220,000 households moved out of New Jersey, about 3 percent of all tax filers. At the same time, more than 193,000 moved in, representing some 2.3 percent of all households.

A look at the county-by-county data

The data also shows movement into and out of counties, providing glimpses into what may be driving some of the mobility.

Hudson County was the only one in New Jersey that saw a net influx of movers from out of state, with about 51 percent of those who moved there coming from another state or from out of the country. The county — and particularly cities like Jersey City and Hoboken along the Hudson waterfront — have been booming with housing and business development.

While the area has gotten expensive to live in, even by New Jersey standards, it is still cheaper than Manhattan. The 3,051 households that moved from Manhattan to Hudson County made up the largest single move from an out-of-state county into a New Jersey county.

On the other hand, New Jersey’s more rural or distressed counties had the highest proportion of movers leaving the state. Atlantic County led all counties, with almost 68 percent of movers leaving New Jersey, for a net loss of more than 1,800 households.

While more people moved out of state from Ocean County than moved in, the South Jersey county saw the greatest net influx from other counties in the state. Ocean County, which has experienced growth in the construction of over-55 and retirement communities, gained a net of more than 2,000 households from all intrastate moves. That more than made up for the nearly 1,400 households that moved out of state, leaving Ocean with a net increase of 687 households from 2015 to 2016.

While statistics show more people moving out of New Jersey than in, that does not mean the state’s population is shrinking. U.S. Census data show that the state’s population grew by 0.3 percent from 2016 to 2017, and by 2.4 percent from 2010 to 2017, largely due to births outnumbering deaths and high international immigration that comes close to matching domestic outmigration. Census officials estimate New Jersey’s population was slightly more than 9 million in 2017.

Interpretations of the trends vary

Some organizations and some Republicans make much of studies that show more people move out of New Jersey than move in as evidence the state, and its taxes, in particular, are too expensive and drive people elsewhere. Most recently, they pointed to United Van Lines’ latest National Movers Study, which ranked New Jersey as the state with the largest outmigration in 2018.

A report from the Center on Budget and Policy Priorities, a progressive think tank, disputes that thinking. It found that differences in taxes make little difference on whether and where a person decides to move.

“For decades, Americans have been moving away from the Northeast, the industrial Midwest, and the Great Plains to most of the southern and southwestern states, regardless of overall tax levels or the presence of an income tax in any of these states,” the report states. “They’ve moved in large part for employment opportunities in the Sunbelt states and, secondarily, for less expensive housing, and, for many retirees, a warmer, snow-free climate.”

The United Van Lines’ study was based on just 2,959 families that it moved from New Jersey to other states, representing two-thirds of all moves the firm handled involving the state. It also moved 1,471 persons into New Jersey. Those are very small numbers, given the state has more than 3.2 million households.

The IRS data indicate close to 200,000 households made interstate moves to or from New Jersey between 2015 and 2016.

The state ranked most popular with out-of-state movers by United Van Lines was Vermont, based on 234 total moves, almost three-quarters of which were into the state.

Interestingly, a law that took effect on New Year’s Day in Vermont belies that view of its popularity. The state is going to pay $10,000 over two years to people who move to the Green Mountain State and work remotely for a non-Vermont company to help recruit workers and solve “the demographic challenges we face,” Gov. Phil Scott said in a statement.

The census bureau estimates that Vermont lost about 2,100 people between 2010 and 2017, when its population totaled less than 624,000. Its median age of 42.6 years was the third oldest in the nation at that time.