Despite Growing Popularity as Relocation Destination, Census Data Show New Mexico Has Seen Net Outflow of Native-Born Residents

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Paul Gessing 505-264-6090

(Albuquerque, New Mexico) The Albuquerque Journal recently publicized Census data indicating that New Mexico is becoming an increasingly popular destination for people to move to from other states. According to the August 17 article, about 4.1 percent of New Mexicans moved here from another state within the last year which puts New Mexico at No. 9 in the nation for the percentage of its residents who had moved from another state within the previous year.

However, the data provide only a limited picture of migration patterns. They do not show, for example, whether the state is suffering net losses of migrants or whether young, educated people are moving to the state or if in-migrants are primarily retirees.

To answer some of these questions using recent economic history, the Rio Grande Foundation studied Census data from 1995-2000 to determine who was coming and going to and from New Mexico and whether it was economic policies, climate, or some other factors that spurred migrations. We also studied the factors that determined New Mexico’s relative attractiveness to migrants from other states.

As Matthew Ladner, Vice President of Research for the Goldwater Institute, and Paul Gessing, President of the Rio Grande Foundation find in their new study, “The Tax Man and the Moving Van,” New Mexico suffered a net loss of citizens to other states during the late 1990s, not to mention, a greater net loss of young, single, college educated people than any other western state (defined as Rocky Mountains or further west). The primary culprit was the State’s poor tax climate.

While Americans flocked south and west during the late 1990s, they generally flocked to places other than New Mexico. For example, Colorado’s Constitutional tax limitation called the Taxpayer’s Bill of Rights strictly limited government spending and taxation, thus making it one of the most popular states for migrants. Colorado, like the rest of New Mexico’s neighbors, gained migrants during this time period while New Mexico lost significant numbers.

This study empirically illustrates that New Mexico cannot rely on its favorable weather as a relocation selling point. And, while recent income tax cuts may have improved the state’s tax climate somewhat, other tax and fee increases may have offset those benefits. In the absence of new data, it is hard to tell the out-migration, particularly of young, single, and educated citizens, is continuing.

Rather than waiting for the next round of Census data to come out, New Mexico’s elected leaders should consider ways to further improve the state’s tax climate by using plentiful revenue to further reduce income tax rates and/or adopt strong Constitutional protections for taxpayers similar to Colorado’s.