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.
Mike “Mish” Shedlock
We’re looking further as in overseas. Just can’t take much more of the regulations and property taxes in WA state. Can’t even build a garden shed or level my lawn as we live near a recently expanded “critical habitat” (drainage ditch). Mind you, this property has been a designated building lot of over 110 years and was even once commercial. And for the privilege we get to pay ~$1,000/month in property taxes. Our county has endless millions for pocket parks, bike lanes and salmon restoration, but we have growing homeless camps in gulleys, rampant hard drug use among the youth and zero affordable housing despite lots of open land all over. We’re making plans on getting out after 24 years.
working remotely in IL in FL. my 250K salary goes alot further down here. wake up illinoians. 2nd homes years ago are becomeing primary homes now out of IL. and at some point out of state 2nd homes become permanent
My property taxes for the 2019-20 tax year were under $2,500 for a house that Zillow says is worth over $1.3 million. Thanks to the efforts of the late Howard Jarvis and Paul Gann (of Proposition 13 fame), seniors in California are not being taxed out of their houses by rapidly escalating property taxes.
Tax tip for those subject to a Required Minimum Distribution from their retirement account for 2020: Fund your charitable contributions directly from your retirement account instead of from other sources. You will still be able to take the Standard Deduction (if it makes sense to do so). Your contribution will will help meet your RMD but it won’t be considered income for purposes of of calculating your Medicare Part B and D payments in 2022.
Prop 13 is evil.
Old folks stealing money from young people.
Population flows are a great investment tool when data is skewed.
The choice of Florida as a destination indicates a wave of retirement has started. Characteristic of that demographic is reduced consumption, strain on pension systems, and net selling of investments.
Anecdotally, my neighbor in 2000 retired just before the tech bubble burst. He bought a boat to live in and sail. I think many people today are taking early retirement falsely believing markets will remain high.
Colorado (well, the I-25 corridor at least) is growing far too quickly for the infrastructure to keep up. Colorado Springs is running out of water and would love to dam up the Arkansas river. I-70 is a parking lot nearly every weekend and a far number of weekdays now. I’m sure the western slope will get a bump once the forest service HQ gets going and the lobbies set up their western expansion.
But where to go? Wyoming seems like the next logical spot, but those winters (and summers…). And it’ll be just as crazy expensive soon too. New Mexico, but only if you can find a property with potable water (and the aquifers don’t dry up). But pretty much any state with a majority of public land isn’t going to be able to keep up with demand from California expats, unless the Feds start selling. But that’ll never happen because it’s political suicide. Or if you’re of the conspiracy-mindset, it’s the collateral that keeps people buying Treasuries.
After a career in financial services came to an end in Chicago this summer, my family of six moved from the North Shore of Chicago to Idaho. Selling a home in the area was not a trivial exercise. In a bullish real estate market nationally, it is certainly not the case in segments of IL. Taxes (real estate, sales, soon to be income tax increase and the myriad of other taxes on services) are a noose. (There is a home in Kenilworth which today lowered price to $850k and has a current property tax bill of $51k. The epitome of what’s going on in the area.) I can tell you in Idaho, the overall tax burden is less and no pension deficit issues to speak of. Plus the lifestyle and way of life while not for everyone, is a perfect fit for us. I hope IL can find a solution to its problems without bankrupting the friends we have there. Good luck. Just know there are alternative places to live.
Kenilworth has fewer than 2,500 residents. Exclusivity costs money.
Welcome to Utah. As long as you don’t vote Democrat or bring socialist, liberal ideas with you. You know, the same ideas that destroyed the state you are fleeing from?
I moved to Utah from Nor Cal 30+ years ago to be close to family. Family roots are in the Intermountain West. Now many H.S. classmates from Nor Cal are moving to Utah. Please, please don’t ruin what we have here! (or in Idaho, Wyoming, or Montana)
One physical problem with Utah is there is not enough water. It is a desert state. Yet somehow the developers keep getting huge new housing tracts approved. Is anybody thinking about that? Or is it all about the money lining politicians pockets?
California is a beautiful state. One of the wonders of the world. There is no place in the world like the Central Valley. Or that has the combination of sea coast, fertile agriculture, and high mountains. The San Francisco Bay is one of the most beautiful places on the planet. Except…too many people have ruined. Too many liberal thinking and voting people. I hope the same doesn’t happen to Utah.
Problem is they flee the socialist blight, but then vote to enact it in the states they arrive in.
Would you stop telling people about Utah? 🙂 We want to stay under the radar.
Just advertise the weak beer, that should keep out the masses.
Sell quick? Was it you or Wolf Street that wrote about weakening in the high end markets?
Better hope they don’t bring Elizabeth Warren in as a consultant on how to retain their population!
I live in a suburb 25 miles NW of Chicago. I complain, just as pretty much everyone, about the situation in IL. But taking a higher level view, the schools are great, the amenities are top notch, and the services are also very good. And lately, we seem to be in a sweet spot for good weather. Sure pensions are going to blow the state up at some point, but I’m stuck here for now!
Corto, you know the people in IL are desperate for rationalizations when they are touting the weather there as a plus!
So $7500 on 200k home? Who the hell can afford that? Our stupid county built a division in a rural area with no property taxes for 5 years but then they are $6k per year on what would normally be half that. Needless to say the bill is due and lot of people are raising hell. We need a totally different system this business of using peoples house as a piggy bank has to stop. We used to have protections for seniors but they ended that. Dont pay you lose. Screw these people.
I own a 150k home here in NC. Dollar for dollar, I’d be paying 5k a year in taxes were the tax rate the same here as Mish is paying in Illinois.
For what it’s worth, that’s more than my mortgage payment.
When taxes take more out of you than a mortgage payment, something is seriously wrong.
The best decision you can possibly make, Mish. Get the hell out, sell the house rather than renting it out and for the time being, get to know Utah and rent a property for at least a year. Good luck!
not Utah its Idaho link to unitedvanlines.com
Keep Florida I am out of FL There are a myriad of reasons to get out of FL
It depends what part of FL you are talking about. Yes, the SE coast of FL (Miami, Boca, West Palm) is a zoo – full of traffic, crime and crowds of ex- NYer’s. Where I live on the West-Central coast (Crystal River) is still relatively peaceful and quiet. Also, this part of FL is almost never hit by hurricanes.
Bam, I am actually looking at Sugarmill Woods and Crystal river area, anywhere along 19 from Spring Hill to Crystal river in fact. I have lived in Florida and I know that there are pockets of poverty and some towns/neighborhoods to be avoided, but that is true in all 50 states, it was true when I lived up in Tallahassee. Numike is right of course, there are reasons to get out of Florida, but there are reasons to get out of the other 49 states also, but from my point of view there is one major overwhelming reason to go to Florida, it is one of the last places I can actually afford a decent house in the USA. And yes I know if I am just patient a little longer there will be many more options on house affordability, all I have to do is wait for the Federal Reserve to fail at it’s bubble inflation in real estate act. At my age I no longer have the time to wait it out. What I can buy in your county for two to three hundred thousand bucks I would actually enjoy living in, what I can get here in this county would be a hovel I would prefer to live in my car.
Another thing I like about Florida, I am exempt from property tax and get free auto registration, the only tax I would have to pay is sales tax which is realtively hefty, but I can cruise down to McDill AFB every month or two and shop at the base exchange now. (I actually was eligible prior to this as a 100% disabled vet, but as of January 1, 2020 any compensible disabled veteran can now shop at the commissary and exchange, as well as shopping the exchange online) Base exchanges are tax free shopping. What I can get in your area for a quarter million I would have to pay half a million or more here for, and one thing I can’t get here is warm weather in Dec.-March.
Can I visit and swim with the manatees?
I visited my home state of Texas this holiday. There is no quality of life there. It is like living in Los Angeles. Cars and traffic everywhere. The interstates were flooded with cars from all over and shoppers from Mexico. My wife and kids nearly got killed by a driver who ran a red light going 50mph in a 35mph zone. 30 years ago Texas was a quiet place that had quality of life, good growth and stability. Now growth is rampant there like California was in the 80s. I fully expect Texas to turn blue in 2024 if not sooner. Taxes will have to rise there as well. The infrastructure outside of highways is actually poor.
Mish southern Utah is nice but why did you wait so long ? St George has become a haven for Californians and others not fleeing high taxes but rampant growth. I know some people who have 2nd or 3rd homes in southern Utah.
Mish I am leaving Oregon, headed to Florida and the main reason is the progressive and quite insane leadership here is making life so ecologically and politically correct that nobody can afford to live here anymore, the middle class is being hollowed out. I may be a democrat but I am not some addle brained mindless socialist who sits wetting themselves thinking about sea level rise and cooked porpoises. The so called progressives also are very military/veteran UNFRIENDLY. God how I wish they would go live in Baghdad for a few years then call us babykillers.
I’m not crazy about an Oregon Democrat moving to my state, Florida. I hope you have learned your lesson and start voting (R).
Notice the #1 state they leave for, Florida. But they won’t stay most of them, I hear it all the time, “I just can’t deal with the humidity.” But, if they are leaving for Texas to get away from high taxes they are going to be surprised, Texas is not a low tax state.
It is true they have no income tax, but, they have a total tax burden with sales and property taxes that are 8.18% which is not that far behind California at 9.47%, and they do have school taxes that do not calculate into the property taxes. Also, many (even most) urban properties (you know, where the actual houses and jobs are) the property taxes don’t pay for streets and storm drains or water sewer or a myriad other services, what is very common there is your subdivision will have an HOA that collects even more to pay for all that on top of your property taxes. I looked at houses in the Houston region a few years back, and house after house I was surprised at how reasonale they were, till I saw the property taxes and then saw several hundred per month in HOA fees and dues, even though they were not exactly in some gated community. In several cases the taxes and HOA combined were as much as the house payments.
There’s a reason Texas is still growing. Despite some problems, it’s more affordable than many other states, plus it offers a variety of climates. A couple of clarifying points are in order since I have lived in the two largest metro areas (Houston and DFW).
Property taxes are high, but they do include school taxes. Tax rates are higher in Houston, but home prices are higher in Dallas. Many communities have HOA’s, but you aren’t looking very hard if you can’t find HOA obligations under $100 per month. $50-100 would be normal in metro areas unless you are in a gated community. The property tax system is two-tiered, and business friendly. Residential homeowners will generally get assessed for property tax purposes for roughly 90-100 percent of market value. Big business will often pay as little as 60-70 percent of market value for property taxes. The reason has to do with their disparate treatment by the central appraisal districts and something known as the “equity” appeal statutes, which ironically enough allow big commercial property owners to be assessed on metrics having absolutely NOTHING to do with market value. The legislature recently passed a “transparency” act, but as you can imagine it avoided the biggest loophole on the books so wealthy commercial property owners could continue to game the system.
It is also one of the states I looked at because they have a 100% property tax exemption for 100% disabled veterans. But I saw a LOT of HOA fees that were higher than you are indicating, some were over $400 and that was not a gated community.
Doesn’t matter where you go,taxes ,fees soaring everywhere,most states the fastest (only)growing “industry”is government.Just to keep up with inflation taxes/fees will have to go up and up and,why?States can’t print money like DC,so you might buy some time,but that’s about it.
Look forward to reports from Utah. Do not delay too long in making the move. You are overdue to get out of that hell hole.
Hey Mish, waiting for your imminent panicky post about how Orange-Man-Bad’s decisive handling of a terrorist nation are somehow against our interests.
Sounds like you’re moving to or near Hurricane, UT. There are some nice properties there. Enjoy!
Yes, very close
Yeah we know, you just want some sister wives action!
Sounds like St George UT to me. Beautiful area for a photographer, right on the AZ border, and not far from Mesquite NV where you can load up on the booze you can’t get in Utah.
You know what is great about living in Illinois?… I can’t think of anything either.
Welcome to the Rockies where it isn’t quite yet Galt’s Gulch but rapidly becoming so.