Last week, the Internal Revenue Service (IRS) belatedly released its migration data for 2022-2023.
The data showed a net loss of 7,561 individuals from Minnesota to other parts of the United States. Figure 1 shows where they went and where they came from. We see that the major sources for Minnesota’s gains of residents were either even higher tax states like California, or neighbors, like North Dakota and Iowa. The main destinations for fleeing Minnesotans were no income tax states, Florida and Texas, and low income tax states, Arizona and North Carolina.
Figure 1: Net migration of individuals to/from Minnesota, 2022-2023
As people move to or from a state, they either bring income or take it with them. IN total, Minnesota lost $1.5 billion in Adjusted Gross Income (AGI) to other parts of the United States in 2022-2023. Figure 2 shows that our state lost $593.0 million in AGI to Florida alone. Curiously, while California was our largest source of domestic migrants that year, we actually lost income to the Sunshine State to the tune of $29.5 million.
Figure 2: Net flow of Adjusted Gross Income to/from Minnesota, 2022-2023
How did this happen? Figure 3 explains why. If we look at the average AGI on the returns of filers moving to Minnesota from California, it is $11,516 lower than the average AGI on the returns of filers moving to California from Minnesota.
Figure 3: Difference of average Adjusted Gross Income on returns of filers moving to/from Minnesota, 2022-2023
The IRS also breaks these numbers down by age and income of the primary taxpayer.
In 2022-2023, Minnesota lost residents, on net, in every category except those aged 26 to 35. As Figure 4 shows, contrary to the narrative that Minnesota’s losses are mostly retirees, our state’s second biggest net loss came among those aged under 26.
Figure 4: Net migration of individuals to/from Minnesota by age, 2022-2023
Finally, as Figure 5 shows, in 2022-2023, Minnesota lost residents in every income category below $50,000 annually and lost them in every category above that.
Figure 5: Net migration of individuals to/from Minnesota by income, 2022-2023
Taken together, these data show that 2022-2023 was another year when Minnesota lost residents and income, on net, to other parts of the United States, generally those with lower taxes. In addition, our state continued to see population loss pretty much across the board in terms of age, with a concerning ongoing loss of young people, and persistent loss of higher income/more skilled workers and gain of lower income/less skilled ones. For the sake of our state’s economic health, we have to work to reverse these trends.
