According to Professor Tom Fauchald, a professor in the Department of Business Administration at Bemidji State University, Minnesota has lost the border battle brain drain competition with Wisconsin, North and South Dakota by wide margins since AY2010. That year, 10,396 more Minnesota young people attended universities in Wisconsin, North and South Dakota than young people from Wisconsin, North and South Dakota chose to get their degrees from Minnesota.
By comparison, the net out-flow from Minnesota to Wisconsin for AY2014 was 13,968 students. In AY2013, the net out-flow from Minnesota to Wisconsin, North and South Dakota was 13,824 students. In AY2012, the net out-flow from Minnesota to Wisconsin, North and South Dakota was 13, 316 students.
Clearly, Minnesota students are voting with their feet by leaving Minnesota for Minnesota’s neighboring states. That isn’t the only instance of people leaving the state. This report from the Center for the American Experiment highlights the fact that Minnesota lost almost $1,000,000,000 in net household income to other states in 2013 alone. According to the IRS, Minnesota didn’t lose those incomes just to neighboring states:
The states that on net receive the most Minnesota income tend to be low tax states such as Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas and Washington.
Still, it’s disturbing that these outmigrations are happening virtually simultaneously. The increased outmigration of wealth and students accelerated the same year the DFL legislature raised taxes that the DFL governor signed into law. Though it’s wrong to immediately state that that’s why students and wealth left, it isn’t a stretch to think that that’s why they’re leaving.
Most of the taxpayers who leave Minnesota for lower-tax states are in their prime earning years. One might think that most high-earning families who leave Minnesota are retirees moving to Florida or Arizona but this is not the case. Working-age people between 35 and 54 account for nearly 40 percent of Minnesota’s net loss of tax filers for the 2013-2014 period. People between 55 and 64, most of whom are still in the workforce, account for another 23 percent. As for the loss in household income, the IRS data show that 34 percent ($343 million) of the net loss in adjusted gross income is from people between 35 and 54. Another 30 percent ($298 million) of the net loss comes from people aged 55 to 64.
The combination of wealth outmigration and the outmigration of students is disturbing. The DFL will insist that their policies aren’t causing the problem. Until the DFL can provide objective, verifiable proof, their claims should be questioned.
Until Minnesota adopts more pro-growth economic policies, expect Minnesota to lose the ‘brain drain battle’ and the wealth outmigration battle. Those people leaving isn’t coincidental.