During the Pandemic, People Left NJ and Took a Record Amount of Wealth with Them, Mostly to Low-Tax, Non-Lockdown Florida

When it comes to domestic migration, how did New Jersey fare during the first year of the pandemic? Unfortunately, not well: New Jersey saw a net loss of over 12,000 taxpayers and $3.8 billion of gross income, the largest annual outflow of wealth in its history. This was despite the largest inflow of wealth from New York on record, as New Yorkers fled New York City during the pandemic. As always, Florida was the big winner, seeing record levels of New Jersey taxpayers and wealth flow into the state. Apparently, being a non-COVID-lockdown state added to Florida’s appeal as a low-tax state.

We now have the Internal Revenue Service data for 2020-21. Here are the details:

New Jersey Overall:

Total outflow: 122,296 taxpayers and $15 billion of adjusted gross income (AGI).
Total inflow: 109,490 taxpayers and $11.2 billion of AGI.
Net: a loss 12,806 taxpayers and $3.8 billion.

From New York:

Total outflow: 22,701 taxpayers and $2.5 billion of AGI.
Total inflow: 49,740 taxpayers and $5.8 billion.
Net: a gain 27,039 taxpayers and $3.3 billion.

To Florida:

Total outflow: 21,705 taxpayers and $4.4 billion of AGI.
Total inflow: 7,567 taxpayers and $676 million.
Net: a loss 14,138 taxpayers and $3.8 billion.

Analysis:

New Jersey’s wealthy residents — and especially retirees — continue to move to Florida. Note that the average AGI for a New Jersey taxpayer moving to Florida was $204,000, while the average Floridian moving to New Jersey earned $89,000. The average for an incoming New Yorker was $116,000. As Sunlight previously reported, high-tax New Jersey is a lousy place to retire, so New Jersey is consistently losing wealthy retirees to Florida. That trend apparently accelerated during the pandemic.

We also hasten to point out that the net $3.8 billion of AGI that New Jersey lost to the rest of the country (mostly Florida) only reflects one year of lost income. But the vast majority of those leaving New Jersey, particularly retirees, are highly unlikely to return to New Jersey. So that income is lost every year for as long as that person lives. So what is New Jersey really losing? $38 billion over 10 years? $76 billion over 20?

So now we have the numbers to measure the cost of Gov. Murphy’s choice to run New Jersey as a high-tax lock-down state during the pandemic. Despite the influx of New Yorkers and their wealth, record numbers of New Jersey taxpayers and their wealth left the state for Florida, resulting in the largest annual loss of wealth in the state’s history.