What does the census really mean for Georgia?
Thankfully, a recent American Enterprise Institute (AEI) study already conducted much of the research around this topic. It compares and contrasts the shared characteristics of the top 10 states where there is a veritable exodus versus the top states where people are flocking, and the data reveal interesting themes.
The top 10 states that are growing the most, including Georgia, tend to be red states—nine have Republican legislatures and eight have GOP governors. Meanwhile, the outbound states, including places like California, New York and Illinois, are largely Democrat-run states. Of course, vast swaths of people aren’t relocating simply based on party affiliation, but they are certainly being lured to states because of certain public policies that stem from the legislature.
On average, the top 10 have done a remarkably better job of managing state finances. “The average fiscal stability ranking for the top ten inbound states was 15 (top one-third) compared to an average ranking of 38 for the top ten outbound states (bottom one-quarter),” the AEI wrote, “suggesting that the fiscal condition of the top inbound states is significantly more stable and sound than the condition of the outbound states.”
This can be seen in Georgia where the state has maintained a AAA bond rating, continues to produce balanced budgets, which is required by law, and has refilled its rainy day fund. Georgia and other inbound states have done this while keeping taxes low too.
“The average state tax burden for the top ten inbound states was estimated to be 7.7% compared to a 9.9% average tax burden for the top ten outbound states,” the AEI study reads. This includes personal income tax and the average top corporate tax rate. In both cases, the rates in the inbound states were less than half of the outbound states.
It’s no surprise that individuals and companies prefer lower taxes, but the ease at which businesses can operate is key to attracting them as well as workers. Research bears out this point. Of the top 10 states where people are moving, all of them are right-to-work states, while eight of the states losing population the fastest are forced-union states. Moreover, Georgia and six other inbound states are ranked in the top 10 for business climate, while four of the outbound states were ranked dead last.
There’s more to enticing migration than this; housing and utility prices matter immensely. The lower the cost of living, the more attractive states are to outsiders. Georgia’s housing is far cheaper than, say, California, which might partially account for the influx of people, but it isn’t all good news. Housing prices have been soaring here, and the Peach State’s electricity bills are about average.
Despite this, policymakers in Georgia have been doing something right. The state’s unemployment rate is at a record low of 2.8 percent. While Georgia isn’t the top place for businesses according to Forbes or attracting the most talent, officials have helped create a welcoming environment for businesses and employees. Yet, if lawmakers want to surpass states like Florida and lead the pack, then they need to become more competitive.
To do so, they must consider lowering the tax burden, making Georgia friendlier to workers, and reducing the cost of living through the free market, and it seems that some legislators have already begun the process. Senate President Pro Tempore Butch Miller (R-49) pre-filed legislation to abolish the state income tax, which Florida, Texas, Tennessee and Nevada have already done. Last year, Rep. Heath Clark (R-147) and Sen. Bruce Thompson (R-14) introduced legislation to make it easier for people who relocate here to get a license to work, but the legislation hasn’t reached the governor’s desk.
As for reducing the cost of living—more particularly electricity costs—there’s an obvious fix. Georgia has a monopoly system for electricity markets. This means that customers do not have a choice over who provides their electricity, and providers do not have to compete with other companies. Instead of perpetuating this system, legislators should permit competition, which will drive down costs for Georgians—much like it has done in other states.
While the census is necessary for reapportionment, it also provides answers to questions on migration patterns. Unsurprisingly, it seems that people gravitate toward places where there are jobs, a healthy business environment, low cost of living and conscientious stewardship of taxpayer money. Georgia lawmakers should keep this in mind.
Image credit: Kevin Ruck