Exodus from NJ costs $5.3 billion in lost taxable income, report says

⚫ Money is moving into New Jersey, but much more money is moving out

⚫ NJ lost 20,000 tax filers in a 12-month period

⚫ New York is even worse off

When someone decides to move out of the Garden State, it's not just a hit to New Jersey's ego — it contributes to a big pool of money that the state may never see again.

According to a new analysis of IRS data by the Tax Foundation, New Jersey posted the fourth-highest loss of adjusted gross income from 2021 to 2022.

Over a year's time, the Garden State lost more than 20,000 tax filers, the analysis shows. Taking into account folks who moved in and out of New Jersey, the report finds New Jersey lost $5.27 billion in adjusted gross income during the 12-month period.

"One reason policymakers should care about their state’s interstate migration patterns is the effect of interstate migration on tax revenue, economic output, and economic growth over time," the Tax Foundation said.

This is a trend

Dating back to the 2004-2005 tax year, the total AGI lost (not adjusting for inflation) in New Jersey is approximately $45.5 billion, according to the New Jersey Business & Industry Association.

"This is a trend that sadly has been growing, versus dissipating," said Michele Siekerka, NJBIA president and CEO. "So what can we do? We need to seriously step back and look at affordability and regional competitiveness."

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New Jersey posted an inflow of AGI worth $12.4 billion for 2021-2022, but like other years, that figure was extremely outmatched by the outflow of taxable income.

Most of New Jersey's AGI losses went to Florida, Texas, North Carolina, South Carolina, and Pennsylvania. On the other hand, migration into New Jersey from New York resulted in an AGI gain of $2.7 billion.

At $23.8 billion, California recorded the biggest loss of taxable income from 2021 to 2022, according to the Tax Foundation. New York, Illinois, New Jersey, and Massachusetts make up the rest of the bottom five.

New Jersey is one of the least attractive states among earners of $200,000 or more who are looking to move.

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