In 2020-’21, Census Bureau data showed that 13,453 Minnesota residents left for other states, our state’s biggest net loss of domestic migrants in at least 30 years. That record stood for only one year: Census Bureau numbers show that, in 2021-’22, 19,400 Minnesotans fled for elsewhere in the United States.
This outflow of residents is not new; Minnesota has lost residents in all but two years since 2001. But the pace of exit is quickening.
Indeed, the situation is so grave that Gov. Tim Walz felt the need to address it recently. “Drives me mad when I see commercials from South Dakota,” he told a reporter for a Sept. 10 newspaper story in the Twin Cities. South Dakota gained 8,424 residents last year.
“I’m going to run ads in Florida for teachers. … ‘Come here! Yeah, it’s a little colder. … But we’ll let you teach’,” Walz further said.
Census Bureau data also show that those Minnesotans fleeing our state — and, indeed, Americans in general looking for somewhere better to live — like what the Sunshine State is offering. In 2021-’22, Florida gained 318,855 residents from elsewhere in the U.S. A good chunk of those fleeing Minnesota head for Florida. Internal Revenue Service data show that, from 2011-’12 to 2019-’20, Minnesota lost, on net, 23,166 residents to Florida, making it the top landing place for departing Minnesotans. And, no, it isn’t just retirees : Minnesota lost residents, on net, in every age group except 26- to 35-year-olds.
Walz’s culture-war rhetoric might arouse his base in the Twin Cities, but it isn’t going to reverse that stampede of Minnesotans to Florida.
Indeed, DFL policy seems almost engineered to keep this outflow of Minnesotans going.
Even with a forecasted budget surplus of $17.6 billion, the DFL is proposing to impose a 0.7% payroll tax on Minnesota’s workers — already some of the most heavily taxed in the country — to fund a paid family and medical leave scheme . The Minnesota Chamber of Commerce says that 80% of its member companies already provide paid family leave. The National Federation of Independent Business, an association of small businesses, says that, “The vast majority of small business owners provide flexibility for employees to pick up kids from school, attend tee ball games, and attend to family emergencies.” A 2019 analysis by nonpartisan House researchers found that just under 200,000 Minnesota workers would take up benefits in the program annually — less than 7% of the state’s workforce.
Then there is a proposal to introduce a new, higher, top tier of state income tax of 12.5% . This would bump Minnesota up from having the seventh-highest top rate of state income tax in the United States to second, sandwiched between California and New York, not coincidentally the top two states for domestic out-migration in 2021-’22, losing a combined 642,787 residents to other states. Coupled with a proposal to impose a surcharge of up to 4% on income from capital gains, Minnesota would have a top rate of income tax of 16.5% , comfortably the highest in the U.S.
The DFL is doubling down on the very policies that are, in part, responsible for the exodus of Minnesotans. A recent paper by economists Henrik Kleven, Camille Landais, Mathilde Muñoz, and Stefanie Stantcheva , that reviewed “what we know about mobility responses to personal taxation,” found that: “There is growing evidence that taxes can affect the geographic location of people both within and across countries. This migration channel creates another efficiency cost of taxation with which policymakers need to contend when setting tax policy.”
For all its talk of evidence-based policymaking and “following the science,” the Minnesota DFL ignores this. Indeed, if the DFL was designing policy with the intention of driving people out of Minnesota, it is hard to see what they would do differently.
John Phelan of St. Paul is an economist at the Center of the American Experiment (AmericanExperiment.org), a conservative public-policy think tank based in Golden Valley, Minnesota. He wrote this for the News Tribune.
The Census Bureau's data on migration trends are a testament to the shifting demographics within the United States, especially regarding Minnesota's population dynamics. The information highlights a significant departure of residents from Minnesota to other states, particularly notable in recent years. From 2020 to 2021, 13,453 residents left the state, followed by an even larger exodus of 19,400 individuals from 2021 to 2022.
This outflow isn't an anomaly but a continuation of a trend that has persisted since 2001, with only two years showing an exception. Governor Tim Walz's concern is evident, particularly when comparing the migration to states like South Dakota and Florida, which have seen substantial gains in residents during the same period.
Florida, in particular, has been a significant attraction for departing Minnesotans. Census Bureau data illustrate that in 2021-2022 alone, Florida gained 318,855 residents from elsewhere in the U.S. Internal Revenue Service records also confirm the trend, showing that from 2011-2012 to 2019-2020, Minnesota lost 23,166 residents to Florida, making it the top destination for departing Minnesotans. Contrary to common assumptions, this migration isn't solely driven by retirees; individuals across various age groups have participated in this trend, with the exception of the 26 to 35 age bracket.
The article delves into political implications, attributing the outmigration partly to the policies of the Democratic-Farmer-Labor (DFL) party in Minnesota. There's a proposed 0.7% payroll tax on workers to fund a paid family and medical leave scheme, despite assertions that most companies already offer such benefits. Additionally, there's a proposal for a new, higher state income tax tier of 12.5%, potentially elevating Minnesota's top tax rate to the second highest in the U.S., alongside a surcharge of up to 4% on income from capital gains, which could lead to a top income tax rate of 16.5%.
Economists Henrik Kleven, Camille Landais, Mathilde Muñoz, and Stefanie Stantcheva have discussed the impact of taxation on migration, emphasizing the role taxes play in shaping geographic relocations within and across countries. Their findings suggest that tax policies significantly influence migration patterns, adding an efficiency cost that policymakers should consider when crafting tax policies.
John Phelan, an economist at the Center of the American Experiment, addresses this situation in the article, attributing the migration trend partly to the policies pursued by the DFL in Minnesota.
This complex interplay of migration, taxation, and policy decisions underscores the multifaceted nature of population movements and the impact of political and economic choices on these trends.
