On the move? Think tanks offer different views on outmigration in Massachusetts

Competing narratives have emerged over whether Massachusetts is facing an immediate outmigration crisis, with a flock of tax policy think tanks laying out arguments over the drivers and extent of population loss over the past several years.

Outmigration conversations have been around for years, but have taken center stage this year as debate over tax relief heated up on Beacon Hill. Some top legislative Democrats and the progressive tax policy think tank MassBudget and Policy Center have started to push back on what they argue are “overblown” claims of outmigration.

Speaking to business leaders Thursday, Senate President Karen Spilka said “a lot of sensational headlines” have run in recent weeks about Massachusetts falling behind other states, either because people are leaving or private investments are fleeing.

“That’s not to say that we don’t need to take a hard look at what is happening in our state,” Spilka said to the Greater Boston Chamber of Commerce, according to her remarks as prepared for delivery. “While I believe the reports of our outmigration are overblown, we do have some serious issues to contend with.”

For the Massachusetts Taxpayers Foundation, “red flags” are waving on outmigration as more than 110,900 people left the state between April 2020 and July 2022 but a progressive group is asking policymakers to take a hard look at the data being used.

Familiar topics have played a role in the discussion over outmigration — high housing costs, particularly in Boston, congestion, cost of living, low rental vacancy rates, long commutes, traffic congestion, and taxes.

The Massachusetts Taxpayers Foundation said outmigration in Massachusetts was most apparent in “growth industries” like the technology sector, where Texas, Florida, North Carolina, and Colorado gained some 160,000 jobs as Massachusetts trailed.

Republicans and the conservative group MassFiscal have hammered lawmakers over what they say is an exodus of high-income earners from Massachusetts because of high tax rates, including the newly voter-approved 4% surtax on incomes over $1 million.

All of the groups agree that people have left Massachusetts but they differ on the extent of the departures and how much political oxygen it needs to suck up on Beacon Hill.

MassBudget President Marie-Frances Rivera said many of those debating outmigration “fundamentally” want the state’s economy to be strong, even if there are disagreements on certain points.

“We want people to be taken care of, and really, the bottom line for us is making sure that we’re able to fully fund education, that we’re able to have the money to invest in our transit systems,” she told the Herald. “And we know that math is real at the end of the day. We have to have money through state tax revenue, federal funds in order to meet that.”

In a policy brief released this week, MassBudget said Census and IRS data suggests that Massachusetts is not facing an immediate outmigration crisis, though the issue is still “worthy of policymakers’ attention.”

And the progressive group said tax cuts — like slashing the short-term capital gains tax or increasing the estate tax threshold — will not change where most high-income earners and wealthy households choose to live.

The Massachusetts Taxpayers Foundation report said U.S. Census Bureau data shows Suffolk and Middlesex County residents left at the highest rates. And 2021 tax returns for 2020 showed residents aged 26 to 35 were the largest group leaving, according to the foundation.

Analysts can have discussions over what the drivers of outmigration are, said Massachusetts Taxpayers Foundation President Doug Howgate, but data shows the state has lost population.

“If people want to have a discussion about what that implies, or if it’s just a blip, or if it’s going to change, I think that’s totally appropriate,” he said. “But I do think that the data indicate that Massachusetts is losing population.”

MassFiscal pointed to a report from Allied Movers, a moving company based out of Indiana, that drew on Census data to show Massachusetts experienced slightly higher outbound migration than inbound. The conservative group also said Massachusetts residents moved to states “that do not have an estate tax.”

“Where are people going to? Who’s our competition?” said MassFiscal spokesperson Paul Craney. “That’s really the question you need to answer. And the top two destinations: number one is New Hampshire and number two is Florida.”

Other reports from the Pioneer Institute, the national Tax Foundation, and Massachusetts Society of CPAs have said IRS data shows outmigration is accelerating, was greatest among affluent earners in Massachusetts, and people are leaving for Florida and New Hampshire.

MassBudget pushed back on the claim that the state is losing billions a year from its economy as households leave Massachusetts. Most taxable income that is lost by people who leave is typically replaced by those who pick up the vacant job or business, the group said.

And the group said high-income households are not fleeing the state at higher rates than others.

An upcoming review of IRS data by the Center on Budget and Policy Priorities for households with an annual income over $200,000 shows Massachusetts “fares better than most other states, with a lower rate than 38 other states, including New Hampshire and Florida, as well as most other states with no state income tax,” the group said.

“We believe in tax justice, we believe that we should have more funding for public investments like housing, like quality affordable earlier ed, that’s really to keep people here in the state and keep people thriving,” Rivera said.