Connecticut had reason to hope that the small influx of people from other states from 2020 to 2021 was a sign of good things to come: a net gain of 516 people and a net gain of $40,036 in adjusted gross income (AGI).
State lawmakers took the news as an encouraging sign for their administration, and Gov. Ned Lamont 2024 State of the State Address“Unlike neighboring states that are experiencing population declines, Connecticut has seen population growth over the past few years.”
In the same speech, he added, “Today, more people are working, more people are starting businesses, more people are joining unions to get better wages and benefits, more graduates are staying in Connecticut, and more people from outside the state are looking to relocate.”
Unfortunately, this is not the case. The previous influx appears to have been short-lived. According to the latest IRS tax migration data, Connecticut lost 6,467 people and $1.06 million to 40 other states between 2021 and 2022, with Florida leading the way. Only nine states saw more people moving into Connecticut than leaving it, with Missouri remaining neutral.
Overall, the Constitution State lost 9,966 people to Florida, or 38% of the total state population loss. To make matters worse, former Connecticut residents who moved to Florida took $1.53 million with them.
Still, state population growth was not enough to offset the decline. For example, about 17,000 New Yorkers moved to Connecticut, accounting for 86 percent of the nine-state net increase combined. These former New York residents brought with them an adjusted gross income (AGI) of $1.49 million.
Meanwhile, Connecticut received income from 13 states. Interestingly, only four of these net income states gained population: New York, New Jersey, Nebraska, and Alaska. Rhode Island and Massachusetts, the second and third largest net population senders, sent a net of 2,323 new residents to Connecticut. However, the total income of the 12,556 people who moved out of Rhode Island and Massachusetts was lower than the 10,233 people who moved out.
Unfortunately, the new data is a return to the demographic problems Connecticut has endured for years. Yankee Lab report He said the state’s problems were “due almost entirely to the failure to attract enough residents from other states or abroad to continually replace those leaving the state.”
Taxes aren’t the only reason why residents decide to stay or leave a state, but it’s suggestive that the only states with similarly high taxes – New York, Massachusetts, Rhode Island, and New Jersey – sent more than 400 people to Connecticut in each of the two periods, 2020-21 and 2021-22. Meanwhile, the only states with low taxes that received more than 400 people in both periods were Florida, North Carolina, Texas, South Carolina, Georgia, Pennsylvania, and Maine.
If Connecticut wants to not only stop its population decline but start growing it, it needs to consider reforming its tax system to keep residents in the state.
You can see it IRS tax transfer data available here.
