By Chuck DeVore
When people vote – with a moving van or a U-Haul truck – they vote for lower taxes and smaller government. That’s the conclusion from comparing a new report on freedom at the state level with the most recent U.S. Census Bureau data.
Over the course of a year a net of 788,381 people moved to Florida, New Hampshire, Tennessee, Texas and Virginia, the “freest” five states in America, according to the Fraser Institute’s annual Economic Freedom in North America index.
The annual report, published by Canada’s Fraser Institute, ranks the states and provinces of the U.S., Canada, and Mexico using objective measures of government spending, tax rates and labor market freedom. The least-free U.S. state is New York. West Virginia, Alaska, California and Vermont round out the bottom five.
According to Census Bureau state-to-state migration estimates through mid-2018, the freest five states attracted a net of 270,608 people from other states while the bottom five saw a net outbound loss of 398,067 residents through domestic migration. New York lost the most, as 458,014 left the state and 254,447 moved in for a net loss of 203,567. California’s net loss was 190,122 for the year.
When adding in overseas immigration, including foreign arrivals, Americans moving to the mainland from Puerto Rico, and expatriates returning home, the top five saw an additional 517,773 new residents while the bottom five received 431,341, erasing their domestic migration losses to eke out a net gain of 33,274 compared to growth of almost 800,000 in the freest five.
The difference in growth over just one year in these 10 states is about equal to one U.S. House seat’s population – showing how migration driven by people seeking a better life ends up changing states’ clout in Congress. Current estimates are that Texas will gain three seats in Congress and Florida, one, while California, New York and West Virginia will lose one seat each, shifting a total of seven votes in Congress from the least-free states to the most-free.
These migration patterns can be seen in U-Haul rates between states. The do-it-yourself mover pays people to drive empty trucks back to states people are fleeing in droves, leading them to charge more to leave California for Texas than heading the other direction, for example. Renting a 26-foot truck from Austin to San Francisco will set you back $1,085 – but moving from the land of blackouts, wildfires and high taxes to Texas will cost the migrant $5,371, almost five times as much!
The rush of Californians trying to become former Californians has gotten so heavy that scam artists are filling the void. The irony here is that California’s own miserable regulatory burden is preventing the market from filling the need by denying state licenses to new moving services, thus creating an underground economy for the desperate looking to leave.
Comparing migration only between the top five and bottom states is illuminating as well. A net of 110,527 moved from the least free to the freest over the course of a year.
While it isn’t likely that politicians in California or New York will reverse course anytime soon to stem the flood of people moving out by cutting taxes and trimming red tape, they might not have to do anything at all to stanch their losses.
Govs. Gavin Newsom and Andrew Cuomo may be rescued by the Biden administration in Washington, D.C., as they deploy the crushing might of federal regulations to flatten the competitive differences between the states.
If you do manage to get on the road to head out of California, you’ll pay the nation’s highest state gas tax at 62.5 cents per gallon as a parting gift. Texas levies a 20 cent per gallon gas tax.
Some of the Californians heading to Texas these days are even from the Silicon Valley’s vaunted venture-capital community. Joe Lonsdale founded technology firms Palantir and Addepar and now runs a $3.6 billion venture-capital firm. On Nov. 15 he wrote in the Wall Street Journal, “I love California, but I had to leave.”
He moved to Austin. Lonsdale then listed a breakdown in public safety, unreliable electricity, a non-responsive government caused by “California’s intolerant far left, which would rather demonize opponents than discuss honest differences of opinion,” and high housing costs made worse by government regulation.
How? For instance, the move to rejoin the Paris climate accords will produce volumes of federal regulations that will increase energy costs in Texas, Florida and other states with affordable fuel and electricity costs while inflicting little additional pain on liberal states.
Freedom only survives if people are able to choose it.