Aug 14, 2023 - News

Harris County lost $1.7B in income during pandemic

Net change in income from migration, 2020 to 2021
Reproduced from the Economic Innovation Group; Map: Axios Visuals

Migration out of Harris County between 2020 and 2021 caused a $1.7 billion drop in adjusted gross income across the county, Axios' Neil Irwin reports.

  • The findings come by way of a new analysis of tax data from the Economic Innovation Group (EIG), a nonpartisan think tank.

The big picture: When millions of Americans rethought their living situations during the COVID-19 pandemic, their moves changed the geography of where money is made in the U.S.

  • The analysis quantifies why some of America's biggest cities are struggling to rebuild their economies post-pandemic.
  • Not only did people leave the biggest cities, but those who left had disproportionately high incomes — meaning the hit to the local economies was larger than migration numbers alone might imply.
Net change in income from migration, 2020 to 2021
Reproduced from the Economic Innovation Group; Map: Axios Visuals

Why it matters: In some areas, income taxes are a major source of municipal revenue.

  • But even places that don't have a local income tax, like Houston and the rest of Texas, depend on residents' incomes to support the local housing market, retail sales and the tax base.

What they're saying: "The scale of urban income flight is a lot larger than I thought it would be," said Connor O'Brien, who conducted the analysis at EIG.

  • "It's very likely that the last couple of years in superstar cities, high earners have become more mobile, while everyone else has been stuck."

What's next: The data only runs through 2021 — but, based on other evidence, the trends may have eased but not reversed, O'Brien said.

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