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There’s one part of Virginia that is doing so poorly that it threatens to drag down the whole state.
It has consistently lost population but now the population exodus is accelerating. The number of people moving out is now more than three times higher than a decade ago.
The problem isn’t just the sheer numbers, either: The people who are leaving make more money than the ones who are moving in, so this part of Virginia is not simply losing people, it’s becoming poorer at the same time.
What is this benighted part of the state?
Surely some of you have guessed the coal counties. An understandable guess but wrong.
Others might have guessed Southside Virginia. Again, an understandable guess, but, again, wrong.
No, the part of the state I just described is actually Northern Virginia. Prepare to have your mind blown.
Some of you may recall that a few months ago I wrote about the latest Census Bureau estimates which showed how Northern Virginia is losing population. Those estimates, though, are just that: estimates, based on certain data. But now we have more data, what some might consider better data. Every year the Internal Revenue Service releases migration data documenting how many people have moved, based on where they filed their income tax from. Demographers consider this more reliable because the government knows where you live. (Of course, this data won’t include people who don’t earn enough to pay taxes.)
Now, what the IRS data doesn’t reflect is what demographers politely call “natural increase” or “natural decrease” – but which the rest of us call births outnumbering deaths or deaths outnumbering births. In relatively youthful Northern Virginia, births outnumber deaths. In most of the rest of the state, deaths outnumber births. I dealt with all that in some previous columns. Roanoke County has the state’s biggest imbalance of deaths over births. In Northern Virginia, births have fallen so much that while they may still outnumber deaths there, they no longer outnumber all the people who are moving out. Welcome to a big new population trend.
The IRS data we’ll deal with here today focuses slowly on in-migration/out-migration – just keep in mind that we’ve previously established that the births-over-deaths numbers don’t cover up these trends. They mitigate them but don’t make up for them.
Here’s something else to keep in mind: This data is for 2020, and compares where people filed their taxes from in 2020 versus where they filed them from in 2019. That means this data is pre-pandemic, which is pretty significant.
So let’s get started, shall we?
Alexandria, Arlington County, Fairfax city, Fairfax County, Falls Church, Manassas, Manassas Park and Prince William County all saw more people move out in 2020 than move in – basically everything in Northern Virginia except for Loudoun County and outlying areas such as Fauquier County and Stafford County.
This isn’t a new trend, either.
Alexandria has seen more out-migration than in-migration every year since 2009. The difference is that in 2009, the city saw a net out-migration of -466 people. In 2020, it saw a net out-migration of -5,042.
Arlington has seen more out-migration than in-migration every year since 2011. The difference is that in 2011, the city saw a net out-migration of -2,797. In 2020, it saw a net out-migration of -8,016.
Fairfax city, like Arlington, has seen more out-migration than in-migration every year since 2009. Then it was -79. In 2020 it was -176.
Fairfax County is always the whopper, no matter what the topic. It’s seen more out-migration than in-migration every year since 2010. The difference is that in 2010, the net out-migration was -6. In 2020, it was -14,231.
Shall we go on? Oh, why not.
Falls Church has bounced around between net out-migration some years and net in-migration other years, although the net out-migration was never more than 71. For three years in a row, 2017 to 2019, the city posted net in-migration. In 2010, Falls Church saw net out-migration of -380.
Manassas has seen net out-migration every year since 2011. In 2020, the figure was -540.
Manassas Park has seen migration trends flip back and forth. In data going back to 2009, only once did the city have two back-to-back years of net out-migration, 2013 and 2014. Now it’s posted three years in a row of out-migration, with 2020 showing up at -199. Not the worst number, but, in context, you see where things are headed.
So what the heck is going on? We’ve been so accustomed to Northern Virginia as a population growth engine that it’s disorienting to think of it as a problem area and yet it is. Now, you may not sense that when you’re stuck in traffic on Interstate 66, but trendwise, this is definitely a problem. It’s a problem because Northern Virginia is so big that it drives the statewide trends.
Politicians (typically Republicans, most recently Glenn Youngkin when he was running for governor) have been warning for years now that more people are moving out of Virginia than moving in. That’s true, but the problem is almost exclusively a Northern Virginia one. In 2020, Virginia saw a net out-migration of -7,561. Fairfax County alone accounted for -14,231.
Still, it’s worth noting where some of those other net out-migration localities were: the Richmond area and Hampton Roads. So, yes, the whole urban crescent is seeing net out-migration. And much of rural Virginia is seeing net in-migration. I’ll have more to say about that another day but for now, this is the important thing to know: It’s those big outflows from Northern Virginia that pull the whole state down.
So why is this happening? And what does it mean?
The “why” is actually the easiest part. Hamilton Lombard, a demographer at the University of Virginia’s Weldon Cooper Center for Public Service, breaks it down this way: “Northern Virginia, like many other urban areas, pulls in young adults and loses older adults who have either retired or got to a place in their career where they don’t have to work in large/expensive urban areas. The populations of many Northern Virginia localities are now declining because they are losing even more older adults and not attracting as many young adults. The vast majority of Northern Virginia’s population are not from the area so it isn’t surprising that many residents don’t stay when they find a better job or cheaper place to work/retire.” It’s hard to stop people from aging out and retiring, so why is Northern Virginia no longer attracting young adults like it once did? High housing costs might be one big reason. Better job opportunities elsewhere might be another.
Here in Southwest and Southside, we see Northern Virginia as this loud, squawking golden goose, but if you’re in Northern Virginia, maybe there are other metros that seem more appealing.
“In the past,” Lombard says by email, “many adults leaving Northern Virginia were moving out to Winchester or Culpeper, now more are moving out of Virginia altogether. This may be related to Virginia’s overall weak economy during the past decade. With fewer opportunities outside Northern Virginia more people are not staying in the commonwealth.”
I’ll get to why this is a problem shortly, but first let’s lay out some more data.
So where are people moving? Let’s just focus on Fairfax County because it’s so big and I suspect many of you don’t have the same appetite for numbers that I do.
In 2020, some 88,778 people moved out of Fairfax County. (The net is lower because 74,547 moved in, but we’ll just focus on the people who moved out here.)
Of those, about half – 44,093 – moved out of state. The biggest numbers went to Maryland: 5,316 to the suburbs on the other side of the Potomac. Of the others headed out of state, 1,820 went into the District of Columbia, 668 went to San Diego, 611 to Los Angeles, 530 to Raleigh, 467 to Seattle, 464 to Charlotte, 459 to Phoenix … and so forth and so on. That’s a shift from 15 years prior when most of the people moving out of Fairfax County moved elsewhere in Virginia.
These clearly aren’t trends that just started happening, but we’re starting to pay more attention to them now because the birth rate has fallen – and no longer covers up the out-migration.
Here’s the other thing of note: The people moving out make more money than the people moving in.
In 2020, the average adjusted gross income of those moving into Fairfax County was $99,374. Good money, right? However, the average adjusted gross income of those moving out was $106,356.
And of those, the ones with the most money were moving out of state. The average adjusted gross income of those moving elsewhere in Virginia was $94,197. The average adjusted gross income of those moving out of state was $116,962. Fairfax County probably isn’t going to feel too impoverished by this but there are some fiscal consequences I’ll get to shortly.
First, though, more cool data from the IRS: The ex-Fairfax County residents with the highest incomes were the 173 who moved to Sarasota, Florida. They averaged $385,798. The 52 people who moved to Indian River, Florida, averaged $311,786. The 259 people who moved to Palm Beach, Florida, averaged $298,620. The 186 who moved to Charleston, South Carolina, averaged $243,959. The 68 who moved to Roanoke averaged $71,563. By leaving Fairfax County for Roanoke, those 68 had the effect of raising the median income in both places.
We see similar figures and patterns for many of the other out-migration localities in Northern Virginia. Those moving into Alexandria had an average adjusted gross income of $85,817. Those moving out averaged $97,541. Of those, the ones moving elsewhere in Virginia averaged $89,150. Those moving out of state averaged $106,244.
Now, if there are any old-fashioned Marxists reading this, or even just garden-variety socialists, you may be thinking, “Good riddance! We don’t need all these rich people anyway! Power to the people! Long live the revolution!”
I hate to spoil the party, but here’s why all these high-income people leaving Virginia is a problem: That’s state revenue walking out the door. Virginia gets 68% of its general fund revenue from the income tax – 16% from sales taxes, 10% from miscellaneous sources, 6% from the corporate income tax.
Now consider this: Rural school systems get most of their funding from the state – more than 60% in Scott County and Buena Vista. That means they are largely dependent on income tax collections.
If we want more school funding, then we need to collect more income tax revenue. If we want more funding for just about anything, we need to collect more income tax revenue.
There are two ways to do that: The harder way is to raise the tax rate. The easier way is to have more rich people around to tax.
Now, there are some who do think Virginia should raise its income tax rate. Good luck with that. All I know is that if Virginia is exporting its most affluent residents, we’ll be collecting less tax revenue from them. I don’t know what those 52 people who decamped from Fairfax County to Indian River, Florida, paid in state taxes on their $311,786 averaged adjusted gross income in Virginia. But I know exactly how much they paid to Virginia once they moved to Florida: zero.
If you believe in taxing the rich, you need some rich people around to tax. That’s why the out-migration from Northern Virginia – particularly the out-migration of more affluent residents to other states – is a matter of some consequence for those of us in Southwest and Southside. To put things bluntly, we don’t care if those people move out of Northern Virginia, but we do want them to stay in Virginia so we can get their money and spend it here. If their option is to move out of state, then that’s not just a problem in Northern Virginia, it’s a problem in Southwest and Southside, too.
Tomorrow I’ll look at some problems this data reveals – and some other opportunities, too.