The number of Americans moving to California is rapidly decreasing. Instead of the continuously debated “California exodus,” the state has seen a worrying trend of people visiting California but choosing not to move there. This is problematic in a world of numerous shortages, which now also include people, who have become a critical commodity necessary for filling jobs, using facilities and businesses, and, most importantly, paying taxes.
The most recent IRS fresh taxpayer stats reveal migration trends for the lucrative demographic cohort of taxpayers: where Americans lived in 2021 when they filed their 2020 tax returns – and if they moved in that year. Although imperfect and unable to track non-filers, this data showed that in 2021, California had 385,188 new taxpayers, which only represent about 1.3% of the state’s nearly 31 million taxpayers. This is the smallest share among all states in the U.S., suggesting that the state is becoming less attractive to potential residents.
In terms of inbound relocations from other states, California’s growth rate has been low for years. Between 2016 and 2021, interstate relocations increased by 11% in the U.S., while Texas had 17% growth, and Florida was up 23%, but moves to California fell 11% during this period. Only two states had more significant drops.
Moreover, the 2021 influx of people into California was dominated by single individuals, while the average new Californian’s tax filings showed relatively small household sizes, and their income has been decreasing from the typical US income for a five-year period.
Who’s coming?
Only a few states with noteworthy growth in inbound relocations showed a theme of proximity: among them, Washington, Oregon, and Nevada.
What’s next?
The decreasing trend of people moving to California from other states reveals an overall population challenge for the state, where the number of California residents counted by the U.S. Census Bureau has been flat. The state has even seen the highest number of exits in the nation, although the outflow represents only 2.3% of state taxpayers. Only nine states do a better job at keeping their residents, and Texas is better at retention than California.
While the slim slice of departing Californians might raise concerns, the Californian population seems comfortable with its status quo, with no clear initiative to market the state as a good place to live. The business community is more concerned with politics, and often politicians are more engaged in saving the world than helping to fix in-state issues.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
