New Jersey experienced a net outflow of nearly $2.8 billion in Individual Tax Return Adjusted Gross Income (AGI) for the tax year 2022-2023, according to IRS data released last week. This figure represents a significant decrease from the record net outflow of $5.2 billion reported in the previous tax year.
The ongoing loss of AGI is seen as an important issue for policymakers, as it directly impacts the state’s taxable income and economic health. The cumulative non-inflation-adjusted net loss in AGI since tax year 2004-2005 now totals approximately $48.25 billion.
“While there are always different outlooks on New Jersey’s broader population trends, New Jersey’s net loss of AGI continues to be a concern,” said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association (NJBIA). “The downstream economic effects of migration are not quite as simple as AGI-in versus AGI-out. But the potential loss of taxable income and available spending power in the state should very much be considered by policymakers as New Jersey continues to struggle with a lack of affordability, extremely high costs of living and business policies that make it more challenging for our job creators to thrive and provide careers.”
For 2022-2023, about $14 billion in U.S. and foreign adjusted gross income left New Jersey while $11.2 billion flowed into the state, based on IRS figures. In comparison, during 2021-2022, there was an outflow of $17.6 billion against an inflow of $12.4 billion.
Former residents from New York moving into New Jersey contributed most positively to inflows at $5.11 billion in 2022-23 compared to +$2.7 billion previously; other top sources included Pennsylvania ($1.39 billion), Florida ($785 million), California ($668 million), and Massachusetts ($318 million). The largest losses were to states such as New York (-$2.97 billion), Florida (-$2.96 billion), Pennsylvania (-$1.56 billion), California (-$821 million) and Texas (-$679 million).
“Despite some broader losses, the New York pipeline is an overall net win for New Jersey,” said NJBIA Research Analyst Jack Ramirez.” More than 73,000 New Yorkers moved to New Jersey compared to about 39,000 heading the other way.” Ramirez added: “Notably, New Jersey gained $5.1 billion in AGI from New York while losing nearly $3 billion.This $2.15 billion net gain reinforces New Jersey’s role as a key extension of the New York metro economy.”
Ramirez also noted that Florida remains a primary destination for departing residents: “Nearly 35,000 New Jersey residents relocated there compared to just 14,000 moving north,” he said.“Florida alone accounts for over 16%of NewJersey’s total population loss which highlights the ongoing pullof lower taxesand warmer weather.”
The NJBIA serves private-sector employers throughout the state according to its official website. It offers advocacy services along with practical information and cost-saving benefits designed to support business prosperity according to its official website. The association also facilitates partnerships among businesses government entities,and academic institutions accordingto its official website.