Outmigration Costs California $24 Billion
Outmigration to other states cost California $24 billion in outgoing personal incomes across 2021 and 2022, according to new IRS data. Departing Californians were significantly wealthier and more likely to have children or spouses than incoming Americans, suggesting that wealthy families are leaving the state as poorer individuals come to seek their California dream.
California lost a net 144,203 tax filers in the two years, representing $24 billion in lost personal adjusted gross income for the state. Those leaving the state had 38% more dependents or joint filers on their tax returns and an average AGI of $130,946, while those coming in had an average AGI of $111,689, or about 15% less income than those leaving.
“This will not bode well for California and its future personal income tax revenues,” said government and pension finance expert and former state Sen. John Moorlach to The Center Square. “It’s not only employees that are leaving, it’s entire businesses. Consequently, it’s not as if we need in-migration to fill empty positions. The positions left, too.”
According to the California Policy Center’s California Book of Exoduses, 304 companies have left California since January 2019, which tracks corporate exits from the state.
California Governor Gavin Newsom touted the state’s return to population growth this year thanks to rising foreign immigration and a slowdown in outmigration, but this financial data shows the state is trading higher income families for lower income individuals.
A new state report found the state’s private sector has lost a net 154,000 jobs and gained 361,000 public sector and taxpayer-supported jobs since September 2022. California is shedding jobs even in sectors growing nationally, such as the information, real estate, finance, and insurance industries.
With the state cutting or delaying spending to fill a $47 billion deficit — thus potentially cutting into taxpayer-funded employment — it appears remaining opportunities for many of these new Californians could be drying up.
