New Study: NJ’s Downward Spiral Continues with 522,288 People and $31 Billion in Income Leaving for Other States Over the Past Decade

Another study, another confirmation of New Jersey’s enormous outmigration of people and wealth. Over the past decade, New Jersey lost a total of -522,288 people and over $31 billion of personal income to other states, the 4th-worst totals in the nation.  Only New York, California, and Illinois were worse. New Jersey’s overall population kept stable due to international immigration (both legal and illegal), but these in-migrants do not match the personal income of the outmigrants, many of whom are wealthier retirees.  With its massive unfunded liabilities and ever-expanding state budgets, New Jersey can ill-afford to continue to lose people and wealth and the tax revenues that go with them, yet raising taxes again and again — as Gov. Murphy has done — will continue to drive people and wealth out of the state.  A downward spiral for New Jersey.

Outmigration of People. Using census and income tax data, the study by Unleash Prosperity found that during the decade of 2015-2024, New Jersey lost -522,288 people to other states, trailing only California, New York, and Illinois, which collectively lost over 5 million people. Massachusetts rounded out the bottom five.

Outmigration of wealth. And when people leave a state, they take their personal income with them. For the decade 2012-22, New Jersey lost $31 billion in personal income, again trailing only New York, California, and Illinois, which collectively lost over $275 billion.  Once again, Massachusetts rounds out the bottom five.

We hasten to point out that $31 billion understates the actual loss of wealth because the IRS only measures the income that left a state in the year that it left, but these out-migrating people will likely never return to New Jersey, so New Jersey will lose that income for every year that person remains out of the state. For most that will be over 10 years.  So we are talking many multiples of $31 billion, and all the spending and tax revenues that go with it.

It is true that New Jersey has kept its overall population steady due to international immigration (both legal and illegal), but those international immigrants bring in less income than the departing citizens, many of whom are wealthier retirees.

Taxes and Migration. Here are the Tax Foundation rankings for state and local tax burdens for each of the bottom five: New York – 50th; California – 46th; Illinois – 44th; New Jersey – 45th; and Massachusetts – 37th. Who are the big migration winners? Unleash Prosperity says Texas and Florida, who rank 6th and 11th for state and local tax burdens, respectively.

Once again, the pattern is obvious: the top five losers are all “blue” states with high taxes, big governments, and powerful government unions. Florida and Texas are the opposite. Taxes aren’t the only factor driving outmigration, but the correlation is clear.

Downward spiral. The bottom line is that New Jersey is going to need that lost tax revenue in the future for its massive unfunded state pension and health benefit liabilities as well as its ever-expanding state budget.  Simply raising taxes over and over again — as Gov. Murphy did to please his government union pals — will continue to drive people and wealth out of the state — the proverbial downward spiral.  Will New Jersey politicians ever come to grips with these facts?