As the COVID-19 pandemic prompted a mass exodus of wealthy New Yorkers, city and state officials have grappled with tax proposals and policy considerations in attempts to keep affluent residents from fleeing for lower-tax states. However, new data published by the Fiscal Policy Institute on Tuesday has revealed a significant reversal in the city’s population trends.
The report, based on the latest census and state tax filing data, indicated that while millionaires are returning in record numbers, lower- and middle-income New Yorkers are departing the state at unusually high rates. Families earning between $32,000 and $65,000 made up the largest group of those leaving the state, followed by individuals earning between $104,000 and $172,000 annually.
The findings of the report underscore concerns that the ongoing migration of working-class residents could jeopardize the city’s recovery. Andrew Beveridge, the president of Social Explorer, suggested that New York would be facing challenges in sustaining its essential services, office sector, and restaurant industry if these upheavals continue.
It is particularly worrisome that Black and Hispanic New Yorkers are being disproportionately impacted by this trend, with many families being priced out of the city due to the high cost of living rather than tax burdens. Danna Dennis, a community organizer, shared her own struggles as a working-class New Yorker raising a family in New York City before leaving for Newark, New Jersey.
Many who have left the state have echoed concerns related to the high cost of living, child care expenses, and difficulty affording quality housing in New York City. The report found that the high-income earners who left New York amidst the pandemic did not necessarily relocate due to tax increases, contrary to earlier assumptions.
Despite the growing migration of lower- and middle-income earners, state officials still balk at the idea of raising taxes on the richest New Yorkers. Governor Kathy Hochul and Mayor Eric Adams have both expressed reluctance to introduce tax hikes, emphasizing the need to live within the state’s means and avoid imposing additional burdens on New Yorkers.
The hesitance to increase taxes on the wealthiest New Yorkers suggests a delicate balance between the need to retain these vital contributors to the city’s and state’s economy and addressing the disproportionate impact of the cost of living on middle- and working-class residents.
As New York grapples with the departure of a significant portion of its population, many are finding it increasingly difficult to consider returning, especially given the stark differences in living costs found in other states.
The report urges state policymakers to focus on retaining middle- and working-class populations by making New York more affordable and livable. Balancing the needs of all residents – from working-class families struggling to afford rent and child care to affluent individuals – is critical for the city and state to secure a stable and inclusive future.
While the report offers valuable insights into New York’s changing demographic landscape, the implications of this population shift will pose substantial challenges for the city and state in the years to come.