By DON FENLEY
TRI-CITIES, Tenn. – Add this information from the IRS and the Economic Innovation Group (EIG) to your file about the affect new residents are having on the Tri-Cities region. The bottom line is the tax data is a granular look at population and demographic changes and how they can affect future local consumer spending.
EIG crunched the IRS 2021 change in average gross income from net migration. It’s an eye-opening look at income change. The analysis says there was a net gain of 3,868 tax returns in the Tri-Cities region.
The base of the study was the average gross income of locals who left and the same for the newcomers. And the difference varied county-to-county.
Hawkins, Johnson, Greene, and Washington TN counties saw the biggest income gain, while Sullivan had the least. Bristol, VA. was the only jurisdiction with declining income data.
The EIG focus is tracking the “enduring fingerprints” the pandemic left on the nation’s geography. “Tracking households’ tax returns as they move from county to county, we indeed find that the flight of workers and families from major cities also entailed a major exodus of taxable income. Concurrently, suburbs and exurbs in booming metro areas across the Sun Belt saw a major inflow of relatively higher-income households, along with pockets of rural areas throughout the country. These patterns, if not reversed, may ultimately have long-lasting impacts on issues including, but not limited to, local housing markets, demand for retail in urban cores, and the fiscal sustainability of public services operated by local governments,” according to EIG.
The study focuses on Florida, East Texas, the Southern Triangle, and swatches of the Mountain West. The bottom line is growing counties are attracting higher-earning migrants, while shrinking counties are seeing flight of higher-income households, on average.
The analysis’ conclusion is tax data offers a highly granular picture of the average economic characteristics of the pandemic migration. “It highlights that shifts in population also involve a real shift in financial resources, a fact relevant not only for local governments trying to balance budgets, but investors, retailers, transit planners, and other parties whose decision rests on forecasts of future local consumer spending.”