The Census Bureau recently released statewide population estimates for July 2020 through July 2021. The total US population has barely changed, but there have been seismic regional shifts. Let’s take a quick tour.
The Northeast lost nearly 366,000 and the Midwest nearly 94,000. The South grew by more than 816,000 and the West by 34,000. The Sun Belt’s undying appeal lives on.
Texas’ population grew by far more than any other state, up more than 310,000 for the year. Florida (211,000), Arizona (98,000) and North Carolina (94,000) also saw substantial increases, as did Georgia, South Carolina, Utah, Tennessee and Idaho (all at least 50,000). Once again, the South dominates.
The states with the biggest contraction between 2020 and 2021 are New York (down more than 319,000), California (-262,000) and Illinois (-114,000). Populations have declined in 18 states, including Massachusetts, Louisiana and Pennsylvania.
One obvious factor is that Texas ranks only behind Utah among the youngest states (tied with Alaska) with an average household size well above the national average. This results in a higher rate of natural increase in patterns of births relative to deaths.
The reasons for the movements are many and varied, but there are common themes. First, states that gain in population generally have lower tax rates. The Tax Foundation estimates that the effective state and local tax rate in New York (the highest) is 14.1%, which translates to almost $10,000 per person. Other states with population losses are also high, with California ranking 8th ($7,529 per person) and Illinois 10th with $6,450. Texas is 47th at 8.0% (only $4,143 per person), Florida is 43rd and Arizona is 45th.
Tax burdens are clearly affecting household budgets and are particularly problematic as the pandemic continues to cause financial stress and rising inflation. There is, of course, a point where taxes are insufficient to support adequate investment in infrastructure, education, health and safety and other public priorities essential to maintaining quality of life and prosperity. over time. Texas faces long-term challenges in this regard.
Destination states also generally have higher economic growth rates and, therefore, greater opportunities. Texas and Arizona are two of only four states that have fully recovered jobs lost during the pandemic. The incidence and policies of COVID-19 also played a role in some location decisions.
The cost of living is yet another consideration. Typical apartment rental prices and home purchase prices are lower in growing states, and many of the most expensive markets are in shrinking states. For example, in Los Angeles, the average rent for a two-bedroom apartment is nearly $4,700, compared to $2,544 in Dallas or $1,693 in Austin.
I expect these changes to continue for the time being. Texas, here we come. Be careful.