Five States Nebraskans Are Choosing Instead of Nebraska

The Good Life is more than just a slogan. It’s Nebraska’s own version of the American Dream. Governor Pete Ricketts’ unveiling of a new state brand that includes the classic motto is receiving a positive public response so far.

But when it comes to living up to the phrase “Good Life. Great Opportunities,” Nebraska may have some work to do.

A new Platte Institute report, “Where Are Nebraskans Moving?” identifies five main states that are gaining income, population, and ultimately, economic opportunities that Nebraska is currently neglecting to retain or attract.

IRS data and U.S. Census Bureau migration figures show that these mostly faster-growing states are gaining the majority of the $3 billion in annual adjusted gross income Nebraska has lost to out-migration since 1992. Travis H. Brown, the author who popularized this annually-released data in his book How Money Walks is our keynote speaker at the August 17 Platte Institute Tax Reform Summit in Lincoln.

The top five states Nebraska competes against for residents and income are:

The Cornhusker-Longhorn rivalry which endured for many decades until Nebraska left the Big 12 continues today in economic policy terms. Texas is our largest economic competitor, gaining $476 million in annual income from Nebraska alone since 1992. Those dollars were brought by people, of course. From 2013-2014, Texas was the second most common state to which Nebraskans moved, and the state is estimated to have grown its total population more in only the last couple years than Nebraska has in a century.

Not far behind the Lone Star State is the Sunshine State. Florida has gained $433 million in annual income from relocated Nebraskans. Migration data shows 1,785 Nebraskans became Floridians in 2013.

Nearly as many Nebraskans decided to become desert dwellers that same year. Arizona has gained $395 million annually through migration from Nebraska. Arizona doesn’t only face off with colder, higher-tax states. It also competes substantially with Texas, not only to retain its population, but to gain residents and income leaving California.

Some Nebraskans might not like everything that’s going on next door in Colorado, but they can’t argue with the numbers. Colorado has gained over $17 billion in annual adjusted gross income from other states since 1992, including $317 million from Nebraska. Colorado’s population has doubled over recent decades and the state currently boasts an unemployment rate that is comparable to Nebraska’s.

The Hawkeye State is a little different than our other competitors. While the income gains to Iowa from Nebraska are not as great as these other states, from 2013-2014, more Nebraskans relocated to Iowa than any other state.

Proximity to Omaha may help make relocation manageable for people on a budget, and tax policy is undoubtedly a contributor. Iowa might as well be Texas for many Social Security recipients and military retirees, whose benefits can become exempt from state income tax by moving across the Missouri River.

Here’s how all these states compare with Nebraska on job growth, population growth, and business tax climate competitiveness (with 1 being best and 50 being worst):

Texas, Florida, Arizona, Colorado, and even Iowa are clearly doing some things right that are worth studying.

Though Nebraska also gains income from states like California, Illinois, New York, and New Jersey, the gains are far smaller than our losses to competitors, to which many residents of these states also flock.

While Nebraska can’t copy all attributes of the country’s fast-growing states, we can look at how people vote with their feet, and gain insight into which states are offering public policies that are more attractive to people and income that can help grow our economy and improve our standard of living.

Removing Barriers in Nebraska Part Two: Where Are Nebraskans Moving? is now available at PlatteInstitute.org/GoodLife. The next issue in our series, which compares how Nebraska’s tax and spending policies stack up against these key competitor states, will be released on July 27.