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Friday, March 29, 2024

Mish: Illinoisans Leave State In Record Numbers… And So Are We

Courtesy of Mike Shedlock via MishTalk

According to new IRS documents for 2017 and 2018, people are fleeing Illinois in record numbers.

New IRS data confirms Record Number of Illinoisans Leave State as Tax Base Continues to Shrink.

The IRS has just released new domestic migration data for both 2017 and 2018 and it shows Illinoisans left the state in record numbers. In both years, Illinois lost more people and more taxable income than in any past year reported by the IRS.

The IRS data complements the new Census Bureau data that shows near-record out-migration of Illinoisans in 2019.

Grim Numbers

  • Illinois lost more than 130,000 tax filers and their dependents in 2017 and another 88,000 in 2018. Illinois’ 2018 loss was the third worst in the country, with only California and New York losing more residents, 153,000 and 160,000, respectively.

  • Illinois lost $6.8 billion in Adjusted Gross Incomes to net out-migration in 2017 and $5.6 billion in 2018. Illinois’ 2018 loss was the third worst in the country, with only California and New York losing more AGI, $8.0 billion and $9.6 billion, respectively.

  • The three biggest gainers nationally in 2018 of residents and their incomes were Florida, Arizona and Texas. Florida was the biggest winner by far, gaining a net 115,000 people and $16 billion in AGI. Arizona gained 65,000 people and $3.5 billion in AGI. Texas gained 77,000 people and $3.4 billion in AGI.

  • When measured on per capita basis, only New York lost more AGI than Illinois in 2018. Illinois lost $435 in AGI per person while New York lost $484 per person.

  • The biggest per capita winners of AGI were Nevada, up $766 per person, Florida, up $762 per person, and Idaho, up $646 per person.

  • Illinois’ neighbors suffered far smaller AGI losses than Illinois in 2018, ranging from a loss of $145 per person in Iowa to just $52 per person in Missouri.

Third Biggest Loser

  • Domestic in-migrants to Illinois earned far less than the Illinois residents who left the state. The average AGI of those who left in 2018 was approximately $85,000, while those who entered the state had incomes of just $66,000.

  • The wealth gap between residents leaving and coming to Illinois has more than tripled since 2000. In 2000, those moving into Illinois earned on average $5,000 less than those leaving Illinois. In 2018, the gap is now nearly $19,000.

Net Loser to 43 States

  • Illinois was a net loser of people to 43 states in 2018, while it netted gains from just six states. The total gain from those six states, however, was trivial – just 667 net residents. In contrast, Illinois netted losses of 88,664 people to the other 43 states.

  • Illinois’ biggest resident losses weren’t just to Florida and Texas, two of the nation’s biggest in-migration winners. Indiana and Wisconsin were the second and fourth largest net winners of Illinois’ residents.

  • All of Illinois’ neighbors netted gains vs. Illinois. Indiana gained nearly 26,000 Illinois residents but gave up just 15,000 of its own. That left Indiana with a net gain of nearly 11,000 residents vis-a-vis Illinois. Wisconsin ended up with a net gain of more than 7,000 residents vs. Illinois. Kentucky, Iowa, Michigan and Missouri all netted gains of 1,200 to 2,900 residents vs. the Prairie State.

Any way the data is sliced, Illinois is chronically losing its population and its tax base. It is a national outlier along with New York, New Jersey and Connecticut. For full information on Illinois’ demographic and out-migration losses, see Wirepoints: Out-migration.

The outflow is particularly alarming given the state’s pension shortfall, which is already the highest in the nation. As the state’s population and tax base continue to shrink, the risk of insolvency for the state continues to rise.

And more tax hikes will only exacerbate the situation  Illinoisans already face the highest total tax burden in the nation, according to Kiplinger and Wallethub.

Illinois’ legislature shows no signs of pursuing the spending and pension reforms needed to make Illinois competitive again. Until that changes, expect the Illinois exodus to only get worse.

Thanks for Wirepoints for the discussion.

Escape Illinois: Get The Hell Out Now, We Are

On October 5, I announced Escape Illinois: Get The Hell Out Now, We Are

We are moving to Southern Utah this year. Going house hunting in February (will rent for a year) and we will sell this one rather than trying to rent it.

Property taxes are too much of a killer to keep it (as in ~$15,000 a year on a ~$400K home).

Yikes. Had enough.

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