Migration

Tax data gives hard numbers to Montana’s pandemic migration trend

California, Washington and Colorado are the top states of origin for people who moved to Montana in 2020, the first year of the COVID-19 pandemic, according to tax return data presented to an interim legislative committee this week.

The study, produced by the Legislative Tax Division with the goal of understanding how migration patterns will affect the state’s long-term tax revenue, provides some of the first reliable data available on migration trends in the pandemic era. . There is already plenty of anecdotal evidence that the pandemic and a subsequent shift toward remote working has brought waves of newcomers to Montana, bolstering local economies and driving up housing prices across the state.

The tax analyst who prepared the study, Sam Schaefer, also used tax form data to identify where in the state new taxpayers are moving and compare the incomes of new and existing Montanese.

In total, partial-year residents moving to Montana filed 18,077 state tax forms, compared to 11,416 forms filed by residents who left the state during the year, a net gain of 6,661 declarants. Since many taxpayers file on behalf of others in their household, this number is likely lower than the total number of people who moved to Montana in 2020.

Citing non-tax data, the report says Montana’s population grew 1.1% overall in 2020 and accelerated to an “extremely strong” population growth of 1.6% in 2020. 2021.

The main conclusions of the tax data study are:

MOST NEW MONTANAINS COME FROM THE WEST COAST AND COLORADO

Of Montana’s new filers in 2020, the largest share, about 2,500, were from California. Washington and Colorado were also the top sending states, followed by Oregon and other western US states.

Credit: Montana Legislative Tax Division

Montana residents who left the state were most likely to go to Washington, followed by Idaho and Arizona.

SOUTHWEST AND NORTHWEST MONTANA HAVE THE MOST PERCENTAGE IMGRATION

Montana’s urban centers – counties encompassing Bozeman, Kalispell, Missoula, Billings and Helena – had the most immigration in terms of absolute numbers in 2020.

Credit: Montana Legislative Tax Division

In percentage terms, however, the picture is slightly different. Gallatin County, including Bozeman, ranked first in the state with 5.2% growth in tax returns in 2020. Behind was Madison County, including Ennis and the Yellowstone Club (4.8% growth), and Flathead County, which includes Kalispell and Whitefish (4.5%). % growth).

Several rural counties in northwestern Montana also recorded strong growth rates: Sanders (4.4%), Lincoln (4.3%) and Mineral (4.3%). These northwestern Montana counties also stood out as the highest-ranked counties in the state for growth specific to taxpayers over 65.

AT LEAST SOME NEWCOMERS ARE HIGH EARNERS

The amount of wealth flowing into Montana with newcomers has been a particular concern in pandemic migration discussions, especially among residents concerned about income inequality and newcomers outbidding existing residents. for limited accommodation.

The study indicates that newcomers in 2020 had on average significantly higher incomes than current residents of Montana: about $110,000 for newcomers compared to about $82,000 for current residents.

Credit: Montana Legislative Tax Division

By contrast, the median income for newcomers, $42,557, was lower than the median for current residents, a statistical oddity that indicates average numbers can be skewed upward by higher incomes. The study found that the top 10% of new residents had an average income of about $599,000, nearly double the average income reported by the equivalent highest-income bracket in Montana.

The median income of current Montana residents in 2020 was around $50,000.

These figures represent adjusted federal gross income, which includes capital gains and business income in addition to wages, and is sometimes adjusted downward for items such as pension contributions or interest on student loans.

THERE IS LITTLE EVIDENCE THAT NEWCOMERS PAY A “LANDSCAPE TAX”

Montana’s wages, which are relatively low by national standards, have long been seen as a kind of “landscape tax” that residents pay in exchange for the enjoyment of living amid world-class scenery. The tax study, however, indicates that this could be a thing of the past for newcomers.

“They came here and got similar paying jobs or they brought their work with them. This was not a scenario where they took a 10% pay cut to live in Montana.

tax analyst Sam Schaefer

Montana taxpayers who arrived in 2019 and remained in the state through 2020 generally did not see their annual income decrease, the study notes. Instead, they saw it increase — by 5% for working-age residents, who earned nearly $74,000 on average in 2020.

“They came here and got similar paying jobs or they brought their work with them. It wasn’t a scenario where they took a 10% pay cut to live in Montana,” Schaefer said.

Credit: Montana Legislative Tax Division

While Montana’s pandemic-era migration trends have continued into 2021, similar tax data for the past year is currently unavailable because many residents have yet to file their 2021 taxes. Schaefer said this week that he expects 2021 data to be available in late fall.

The full Legislative Tax Division study is available at leg.mt.gov/content/publications/fiscal/2023-Interim/March-2022/mara-march-2022.pdf

This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication about issues, trends, and values ​​important to Montanans. Discuss MTFP’s Long Streets work with Senior Reporter Eric Dietrich at [email protected]

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