Could It Be the Weather?

A blog post from Michael Wood, originally published on Third and State.

The Delaware County Daily Times reprinted a story from the PA Independent (the state news service started by the Commonwealth Foundation) which mistakenly blames unions for the out-migration of taxpayers in the state.

Here is the claim:

The Tax Foundation, a Washington, D.C., tax policy nonprofit, tracks tax returns filed in every state to determine how shifts in population affect working by tracking the Social Security numbers of income tax returns filed with the IRS each year.

Between 1999 and 2008, Pennsylvania saw an overall decline of 84,000 tax returns. The top three destinations for people leaving Pennsylvania during that time — Florida, Virginia and North Carolina — are all right to work states. The data is the most recent available.

There are a couple of problems with this rationale.

1. Not many people move between states as a share of the population. According to data on the IRS's website for the period 2004 to 2009, Pennsylvania lost a net 21,847 filers. This equates with less than 0.2% of our population. Most people who move do so to neighboring states.

2. Included in these numbers are retirees. If you aren't in the workforce, I don't think workforce policies are high on your priority list.

3. A bigger issue, particularly for retirees, is likely weather. I don't hear about people retiring to Minnesota or New Hampshire, but I do hear about people going to where it is warmer — places like Florida, California, Arizona, North and South Carolinas, and Texas come to mind — and that is precisely where people are going, the data show.

In fact, when you look at the 2004-2009 data, nine of the top 10 states receiving filers who lived the previous year in Pennsylvania enjoy milder winters than we do.

PA Filers Lost to Warm Weather States

Filer information comes from the IRS. Weather data come from the NOAA.

One thing that can't be claimed from this data is that people are moving to lower their income taxes. In these top 10 net destination states, all but Texas and Florida have higher personal income taxes than Pennsylvania. For many retirees, Texas and Florida offer little in terms of income tax savings, as Pennsylvania doesn't tax pension income.

The Center on Budget and Policy Priorities recently took a look at whether taxes have much impact on where people decide to live and found that other factors, including home prices and weather, are more important to people.

So how should Pennsylvania deal with this manufactured crisis? Abolish unions so employers can pay people less, give everyone a heat lamp and raise Pennsylvania's income taxes?

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