From the New York Times:
A state short on cachet, New Jersey is getting longer on wealth: New figures from the Internal Revenue Service show that those who moved in last year have more money than those who left, a result, some experts say, of the rising cost of buying a home in the state.
The data from 2005 tax returns show that the median adjusted gross income of households coming to New Jersey from other states was $34,081, compared with $31,491 for those departing New Jersey. New Jersey seems to be absorbing more affluent taxpayers at New York’s expense: Last year, 30,082 households, with a median income of $42,889, moved from New York to New Jersey; the 19,381 households that New Jersey lost to New York had a median income of $34,003.
“What the I.R.S. data is saying to me is that it’s only the wealthy who can afford to live in the northern half of New Jersey,” said Tim Evans, research director of New Jersey Future, a planning group. Of those moving out, Mr. Evans said, “My guess is that they’re middle-income people who are moving out for the four-bedroom house.”
Looking at a different set of numbers released by the Census Bureau earlier this year, New Jersey regained its No. 1 ranking for total household income in 2005, with a median of $61,672, just ahead of Maryland ($61,592) and Connecticut ($60,941). New York is 15th, with a median income of $49,480.
Regardless of what is happening with the very rich, James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers, said New Jersey was losing too many middle-income people because of high property taxes and housing costs.
The number of residents going to other states has been increasing for years, Mr. Hughes said, and the most recent annual loss reported by the Census Bureau was 72,547 — “probably the highest net out-migration we’ve ever had.”
For companies that try to transfer people into New Jersey, there’s always the issue of sticker shock and higher housing costs,” Mr. Hughes said. “So one way of looking at this is that the only people who can move here are the higher-income ones.”
The 2005 tax data did not include the 54,000 immigrants who settled in New Jersey last year. If they are on the lower end of the income scale, Mr. Hughes pointed out, that could offset the increased median income from the interstate moves.
“It may well be that some of the people moving in are high-income New Yorkers moving to the Hudson County waterfront or to Montclair,” he said, “but given a 54,000 gap, do we still have a net gain?”
New Jersey residents who left last year were moving to New York most often, but almost as many went to Pennsylvania (18,806 households) and Florida (17,369 households).
Most of them were retirees or younger families in search of bigger houses, said Mr. Evans of New Jersey Future, who has traced migration in and out of New Jersey in detail. He documents a continuing westward flow across the northern tier of the state and into Pennsylvania while Philadelphia sends people to South Jersey.