A conservative think tank from Omaha said Wednesday that five states — Texas, Florida, Arizona, Colorado and Iowa — are Nebraska’s top economic competitors.
The Platte Institute for Economic Research said it would study those states’ public policies to see whether there are changes Nebraska could make to improve what the institute said were unfavorable trends of people and their incomes leaving the state.
Sarah Curry, policy director for institute, said Nebraska can’t duplicate Colorado’s mountains or the warmer weather of Texas, Florida and Arizona, but taxes, education, regulation and other policies also may be factors people consider when they relocate.
Iowa, for example, has a similar climate and yet attracts people from Nebraska, at least in part because of lower taxes on retirement benefits, she said.
The institute’s report, based on research from economist Russell Sobel of the Citadel in Charleston, South Carolina, cited U.S. Census figures, tax data and a study by the Heartland Institute, a Chicago-based conservative think tank.
The Heartland study said that between 1992 and 2014, people with incomes totaling $3 billion left Nebraska.
The top five states receiving that income were Texas, Florida, Arizona, Colorado and Missouri. Curry said the report listed Iowa as a top competitor rather than Missouri because the Census Bureau said 8,600 people moved from Nebraska to Iowa in 2014, the most of any state, while 3,250 moved to Missouri.
Besides Iowa and Missouri, the states and the number of Nebraskans who moved in 2014, the survey said, were led by Texas, 3,340; California, 3,140; Colorado, 2,900; Kansas, 2,640; Florida, 1,785; Arizona, 1,780; South Dakota, 1,410; and New Mexico, 1,200.
Curry said the report didn’t cite figures on people moving into the state because it is aimed at finding where Nebraskans are moving.
The institute is publishing a series of reports to identify what it says are policy barriers on taxes, education, economic policy and entrepreneurship that stand in the way of greater economic growth in Nebraska.
Separately, demographer David Drozd, research coordinator for the Center for Public Affairs Research at the University of Nebraska at Omaha, said in an interview that although climate and family ties are important in choosing where to live, taxes or other policy matters also can be reasons.
“Nebraska does not score real well, especially on treatment of military pension income and other pension income,” Drozd said. “It’s one of a handful of states that tax Social Security benefits to the full extent. We’re not necessarily real competitive for taxation, among seniors especially.”
In 14 of the past 15 years, he said, the state had a net loss of people to both South Dakota and Wyoming, states with similar weather but no state income taxes.
“It is a factor,” Drozd said. “People do vote with their feet.”
As for the state losing income in state-to-state migration, he estimated an average net loss for Nebraska of about $156 million in each of the past three years, even though more people moved into the state than out.
That income figure doesn’t include people who don’t file income taxes, he said, such as full-time students who don’t have incomes, he said, and people who move into the state from other countries and haven’t filed U.S. tax returns.
“Migration is complex, and trying to break it down is difficult,” Drozd said. “We do know that we lose people, net, with bachelor’s degrees and more education, and those are folks that tend to have the higher incomes. There are some challenges that the state faces.”
Drozd said data from the Census Bureau show net gains in the state’s population each decade since the 1990s, the first decade since at least the 1920s that the state had a net in-migration.
Since then, Drozd said, 68,200 more people have moved into the state than out, including 14,400 between 2010 and mid-2015.
The reason is that more “international” people have come to Nebraska than “domestic” people have left, he said.
Drozd said people in two age groups are the most likely to leave the state: in their early 20s, after college or while starting careers, and at retirement age, 55-74.
People are most likely to move into the state between ages 30 and 34 — many of them returning to their native state in search of better schools, safer streets and closeness to relatives — and after age 75, often retirees coming back “home,” he said.
Curry, from the Platte Institute, said looking at the five competing states can prompt discussion about changes in policy to improve Nebraska’s economy.
She said the Tax Foundation, a Washington, D.C.-based research group, ranks Nebraska 27th in business tax climate, with Iowa 40th, Arizona 24th, Colorado 18th, Texas 10th and Florida fourth.
That means Nebraska isn’t the worst, she said, but has room to improve.
“There is something that is attracting people to leave Nebraska and causing people to move to other states,” Curry said. “They’re looking for something that obviously Nebraska doesn’t have.”
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