A year ago I explained how Wyoming, having lost population from 2010 to 2014, suddenly saw an uptick in net migration in 2015. We had a net inbound migration from the Centennial State of 5,857 people, a substantial number that I attributed to rising cost of living in the northern Colorado I-25 corridor:
According to the calculation tools provided by bestplaces.net, the median house price in Cheyenne is 40 percent lower than in Fort Collins; a Colorado family can save a good chunk of money and still get a bigger house in Cheyenne than they could in Fort Collins. Overall cost of living is 24 percent higher in Fort Collins.
Furthermore, I explained:
it does not take much of a change in state tax policy in Wyoming to neutralize the advantages that invite a family to move up here from Colorado. In fact, if we are talking about upper middle income-earners, in other words white-collar professionals earning $65,000 and up, then all it takes to make Wyoming unattractive is a three-percent personal income tax.
Now, it turns out, the inflow of Coloradans to Wyoming has almost stopped. In 2016, when the conversation about higher taxes started here in Wyoming, the new inflow from south of the border fell to a minuscule 570 people. One tenth of what it was a year before.
Against this background, it is mystifying to hear Wyoming Principal Economist Wenlin Liu and Cheyenne City Councilman Dick Shanor talk about Cheyenne as a migration magnet:
For two consecutive years, Wyoming's population has continued to decline, particularly due to the state's economy according to Wyoming Principal Economist Wenlin Liu. However, unlike the trend, Cheyenne City Councilman Dicky Shanor says the Capital City has actually continued to grow one to two percent every year. Both Shanor and Liu anticipate growth in the area in 2018. Shanor said economic growth in Northern Colorado has already started to trickle over the state's border into Cheyenne. He said, "This economic growth going north in Northern Colorado, for years it's been sort of an economic detriment to Cheyenne." Shanor added, "We lose out on a lot of sales tax, a lot of people going down there to eat, shop, etc... But now, I think, it's very advantageous for Cheyenne."
I am sure that higher state sales, property and excise taxes here in Wyoming - not to mention higher taxes in Cheyenne - will do us a fat lot of good in competing with Fort Collins and other cities in Colorado.
Liu says while Colorado has continued to see that growth and been the Cowboy State's number one competitor when it comes to the labor force, the neighboring state has also experienced their own inconveniences. Liu said, "Colorado is getting to a point their traffic congestion, also their housing price, has increased so much for the past three to four years." For anyone deciding to leave Wyoming, Liu says they might think twice. Shanor agreed and said, "As the inconveniences such as traffic and other issues make Colorado a more challenging place to live and raise a family, I think we're gong to see a lot more people look at Cheyenne as a place to settle their roots."
This is all speculation. So far, the numbers indicate that the surge in inbound U-Hauls from Colorado in 2015 was an anomaly.
In fact, the total interstate migration numbers for 2016 show a continued net outflow of people from Wyoming:
Wyoming net migration
|New Mexico||601||New Hampshire||-|
|North Dakota||501||New York||(26)|
|District of Columbia||-||Idaho||(1,956)|
Given that Idaho has become a national migration magnet, it is not surprising that we suffered a bigger net loss of population to the Gem State. From 2010, the bottom of the Great Recession, to the end of 2016, private businesses in Idaho created 90,000 new jobs. That is an increase of 18.5 percent in six years.
During the same period of time the Wyoming economy lost 1,600 private-sector jobs, a decline of 0.8 percent.
Perhaps it is worth noting that Idaho gets by with a government that is notably smaller than ours: where our Government Employment Ratio is 305, they get by with "only" 189 state and local government workers per 1,000 private-sector employees. This, by the way, is only marginally higher than Nebraska (184) and almost exactly the same as South Dakota (190).
And just to dispel any fairy tales about Idaho being a highly urbanized state and that this somehow is the reason why they do not need as big a government as we do, the Gem State ranks 44th in terms of population density. Only New Mexico, the Dakotas, Montana, Wyoming and Alaska are less densely populated.
Back, now, to the migration data. While we lose more people to Idaho than to any other state, it is interesting to see how Nevada and South Dakota rank second and third. In both states, legislators are struggling with big state budgets, with an increase in the state sales tax in South Dakota in 2016 and proposals for excise tax hikes in 2017. Rumors have it Nevada is considering a state income tax, though there is no tangible evidence of one being on the way. Despite all this, both states gain population from us, the state that is supposed to have the nation's most business friendly tax climate...
The net loss of jobs to California is not surprising: these numbers include government workers, which in turn include military. California remains the biggest attractor point for those who want jobs in the tech industry, though that is changing.
On the other side of the numbers, it is not surprising to see that we gained most people from Pennsylvania. Governor Wolf and the Democrats in Harrisburg have been raising taxes at a pace and with a creativity that would make our own Revenue Committee green with envy.
The Texas numbers can, at least in part, be related to military migration, though with its high cost of living the Lone Star State can seem like a worse deal to some than Wyoming. However, if Taxmageddon becomes reality, as the tax hikes work their way into the economy, whatever cost-of-living advantages we have will go away.
And just in case anyone still doubts the detriments of tax hikes, here are the net migration numbers for California:
|California net migration|
|New York||18,251||New Hampshire||-64|
|District of Columbia||2,411||Tennessee||-1,838|
It might be surprising that California is still losing population to Oregon. Keep in mind, though, that taxes are actually not yet as high in Oregon as they are in California; while the legislature in Salem have been hard at work to find new revenue, their buddies in Sacramento have worked equally hard to keep their position at the head of the tax pack.
California's loss of jobs to Texas is not new. It has been going on for quite some time; when we get the 2017 numbers we will see effects of Toyota moving its North America headquarters from The Welfare State to the Lone Star State.
With that said, it is almost amusing to see how tax-to-the-max states like New York, Illinois, Minnesota, Maryland and New Jersey lose a total of 36,000 people in net outbound migration to California. New York has long led the country in the quest to become America's highest-taxed state. IIllinois has given the Empire State a run for their tax money, while Minnesotans have decided to embrace their Scandinavian roots by importing the world's most dysfunctional welfare state. In Maryland they are still trying to deal with Governor O'Malley's legacy: in the first five years of his gubernatorial tenure he raised one tax every ten weeks.
And, to be perfectly honest, if I lived in New Jersey and had the financial means to do it, I would probably also move to California. After all, if you are going to surrender your money to government anyway, you might as well get a little bit more sunshine in the bargain.
That's all for today, folks. See you back here tomorrow!