One theme of this blog is that New Jersey is overtaxed is that having high taxes induces very low population growth.
In making that argument, I used authoritative data from the US Census, such as State Population Totals and State to State Migration Flows. For job growth, I used authoritative Bureau of Labor Statistics data.
My analysis is only as good as my data, and in the case of New Jersey's population growth, the Census data I relied badly underestimated New Jersey's population growth 412,000 people (4.58%).
Although estimates are just estimates and it's understood they aren't exact, the Census's mistake for NJ is its largestfor any state. Instead of an estimated population growth for the 2010s of +80,000, our actual population growth is +497,000.
States whose 2020 populations were underestimated the most in official estimates:— Nick 🍍 (@TossupReport) April 26, 2021
New Jersey (+4.58%)
New York (+4.47%)
Rhode Island (+3.81%)
North Dakota (+1.80%)
Instead of having a population growth that was expected to be the ninth slowest in the US, our population growth was actually the 26th slowest, meaning 25th highest. New Jersey's growth of 5.65% is thus at the median of states, and only somewhat below the national weighted average of 7.4%.
The error in the Census estimate for NJ is huge and is outside the margin of error for their reports. For instance, for 2018-19 State to State migration, the Census estimated that 229,484 people moved out of NJ, with a MOE of +/- 11,928 and 149,260 moved in with a MOE of +/- 9,572. Immigration into NJ was 60,826 with a MOE of +/- 7,820.
Even if the move-out number was 11,928 too high, the move-in was 9,572 people too low, and the immigration was 7,820 too low, that's only 29,320 additional people in NJ, which doesn't equal the 40,000 annual "hidden population increase."
In the 2010s, instead of New Jersey's growth coming in at 16% of the national average (which would have been our worst ever), it was 77% of the national average, which is the best we've done since the heyday of suburbanization of the 1950s-1960s.
Faced with the reality that NJ had solid population growth in the 2010s, I have to admit that perhaps my thesis that high taxes are strangling New Jersey is exaggerated. More people are either unaffected by NJ's high taxes, tolerant of the high taxes, angry but stuck here, or supportive of New Jersey's taxes than I thought.
Population change is determined by three things
- natural increase (ie, births minus deaths).
- domestic migration.
We know New Jersey's births slowed down. There were only 1,027,274 babies born in NJ 2010-2019, versus 1,143,427 in the 2000s.
We know NJ's deathcount also rose slightly, from 719,513 in the 2000s to 724,387 in the 2010s.
Thus, the cause of the Census's discrepancy must be a large underestimate of immigration and/or an overestimate or net domestic outmigration. It's entirely possible that thousands more people are living "in the shadows" in NJ than anyone realized and the Census's estimates missed them. It's also possible that the 2010 Census count for NJ was an undercount.
Although those of us who warn about the negative effects of high taxes on population growth must be humble now and rethink our positions, in terms of economic growth, the 2010s were a bad decade for New Jersey, with our 2007-2018 income growth coming in at the country's eighth lowest.
New Jersey's growth in the 2010s isn't exactly vindication of the progressive case either, since a conservative named Chris Christie was governor for eight years of that period and New Jersey's property taxes increased more slowly than in previous decades.
If someone argues that New Jersey's average population growth validates a highly-progressive tax structure, the population growth of high-earners in New Jersey, based on verified IRS data, is still among the country's lowest.
Anyway, it is a time to rethink demographic, population, and fiscal conditions in New Jersey. Are taxes are damaging as I thought? No. But is New Jersey still overtaxed and is our budget out-of-whack with neglect of non-PreK-12 items? I think so.
EJ McMahon presents some interesting ideas about the Census's underestimate of NJ's population:
Where are all those people?So what accounts for New York’s estimate-census gulf? Demographic data grinders suggest at least three possible factors:
- Since 2010, the Census Bureau has changed its annual estimation methodology in a way that resulted in a lower count of foreign immigrants, which have accounted for an especially large share of New York’s population growth over the past 40 years.
- New York State and New York City officials provided the Census Bureau with a large number of addresses that were not in the Bureau’s master file.
- The Census Bureau had an expanded outreach program for 2020, which for the first time included the option of filling out census forms online. The federal outreach effort was heavily promoted and augmented by immigration activist groups, subsidized by the state and city, in the New York metropolitan area.These factors don’t explain the trends in all immigrant-intensive states, however. For example, the difference between Census estimates and the 2020 official Census in California, Florida and Texas were tiny at 0.2 percent, 0.4 percent and 0.6 percent respectively. New Jersey, on the other hand, had the largest percentage difference between its 2019 estimate and 2020 census count: 4.6 percent.
The WSJ also documents that Covid produced a huge movement into NJ from NY, although that would have mostly taken effect after the Census's snapshot day.
The exodus from New York City has been a boon for New Jersey. The state more than doubled its new households from migration in 2020 from the prior year. In 12 suburban New Jersey counties, net growth from relocating New York City residents rose to more than 35,000 households in 2020, up 76% from the prior year.