Population:  Still Losing

by Tom Yamachika, President, Tax Foundation Hawaii

This week, we get to look at Census numbers, distilled and brought to us by Pacific Business News, that tell us whether we gained or lost people during 2021-2022.

We lost. Again.

According to the data, 67,257 people left Hawaii for somewhere else in the U.S., while 56,209 moved in.  The top five destinations for the people we lost were California, Washington, Texas, North Carolina, and Nevada. Interestingly, three of these five states (Texas, Washington, and Nevada) don’t have an individual income tax. In any event, it’s a net loss of about 11,000 people, comparable to recent years.

Yes, “years.”  For the past decade, Hawaii has been consistently losing population. A loss of 11,000 in 2021-2022 might not even be news to some.

2022, however, was a post-COVID recovery year. Our economy was going like gangbusters. So, we can’t simply say the population loss was a result of lackluster economic forces. That excuse may have held up in the COVID lockdown years. 

A separate analysis by background check and employee screening company Checkr also tracked population migration within the U.S., observing that “Remote work — and its popularity that sprung from Covid-19 — has, for many, completely transformed daily life and even allowed individuals across America the opportunity to relocate to a place better suited to their lifestyles and budget.”

In other words, people appear to be moving to follow their own lifestyle and budget and appear to be less constrained by the requirements of their employers.

How does that relate to us?  We really need to be careful that we don’t make the problem worse for ourselves. For example, in 2024 there will be a lot of pressure in the Legislature to do something about the poor folks on Maui whose homes and businesses were burnt to the ground. “Doing something,” of course, costs money. Right now, the recovery efforts from State government are being funded, in part, by diverting money that was appropriated for other things. In the 2024 legislative session, those projects from which resources were diverted will have constituents who will want the diverted money to be restored, perhaps with a little extra to pay for the delays resulting from the diversion.

So, who pays for the restoration of these resources?  Hint:  Governments don’t pay taxes. Taxpayers pay taxes.

We expect that the 2024 legislative session will be debating scads of “revenue enhancement” proposals. “The wealthy must pay their fair share,” you are likely to hear. But who’s “wealthy” and what’s a “fair share”?  Those questions have come up before and the answers are different depending on who’s answering.

So, we leave you this week with a word of warning. Are we going to put more pressure on our taxpayer base to dig into their pockets ever more deeply?  If we are, we shouldn’t be surprised when more and more people buy one-way plane tickets and head for the airport.