Indiana Sees Net Migration From Surrounding States

The Fort Wayne Journal-Gazette has an interesting story today analyzing the movement of the residents of Indiana and its surrounding states based on IRS data. It finds that more people are migrating to Indiana from the surrounding states of Kentucky, Illinois, Michigan and Ohio than are moving from Indiana to those states; however, the movement for the period analyzed between 2005 to 2009 was not as significant as some might think given the campaign launched by Indiana to lure people and businesses from other states. From Ron Shawgo's story:

During the early days of the national recession, Indiana officials installed billboards along the state’s border inviting outside businesses and residents to move.

“Come On IN for Lower Taxes, Business and Housing Costs,” the billboards urged.

In the rough economic years that followed, it appears few people took advantage of the offer.

From pre-recession 2005 to 2009 when it technically ended, Indiana’s share of people moving from Kentucky, Ohio and Michigan remained level, while the share relocating from Illinois declined.

But even without significant movement from surrounding states, more people moved to Indiana than moved out during the period, according to U.S. Internal Revenue Service data . . .

The IRS figures come with some limitations. They count people, not business movement among states. Indiana’s billboard campaign, sponsored by the Indiana Economic Development Corp., primarily was directed at businesses.

In addition, the data include only those who filed income tax returns, which leaves out many poor and elderly residents. Also excluded are the small number of returns filed after late September each year.

Surprisingly, the report indicates that the mobility of Americans overall during this period declined to one of the lowest levels since the 1940s with about 44% citing job or business opportunities as the reason for moving. Illinois is providing the biggest pipeline of people moving into the state, but the number isn't as significant as you might think. It also looks like younger people tend to move out of Indiana to Illinois, while older people are moving from Illinois to Indiana, and the migration gap between the two states has narrowed in recent years despite Illinois' growing tax burden:

Businesses aside, far more Illinois residents move to the Hoosier State than the other way around. In fact, more people from the Land of Lincoln move to Indiana than to any other state. But the number moving in dropped 16 percent between 2005 and 2009 to 19,500 people. Meanwhile, Hoosiers moving to Illinois increased 17 percent to 15,700.

Put another way, the migration gap favoring Indiana narrowed from about 9,700 people to about 3,800 in those five years.

“The truth is, I think a lot of that is driven by patterns in the Chicago area,” said Matt Kinghorn, an economic analyst and demographer for the Indiana Business Research Center, a part of Indiana University.

While the trend slowed over the five-year period, nearly 44,000 people moved from Illinois’ Cook County to Indiana’s Lake County, more than twice as many as made the reverse move. They resettled in Indiana mostly for reasons related to housing and cost of living, Kinghorn said. Those moving from Indiana to Illinois are largely young adults transplanting to Chicago, he said. Later in life, many will make the reverse move, heading to suburbs in Indiana, Kinghorn added.

Data for Indiana’s three other neighboring states show stable migration in recent years.

On the tax burden side, Indiana fares better than all of its surrounding states, except Kentucky, on overall tax burden according to the report, but its ranking rose from 42nd to 25th during the past decade:

In February, the Tax Foundation, based in Washington, D.C., ranked Illinois 13th, Ohio 18th, Michigan 21st and Indiana 25th in overall tax burden for 2009. Kentucky ranked 30th. Indiana has moved up the list since ranking 42nd a decade ago.