Rankings, reports paint different pictures of Massachusetts

Chris Lisinski

STATE HOUSE, BOSTON, SEPT. 17, 2024…..How many people are leaving Massachusetts for other locales? At what point does that become a crisis? Are we number one in the most important rankings, or a number much larger than one?

Like so much else on Beacon Hill, the answer to those questions depends on who you ask.

A new report published Tuesday by the left-leaning Massachusetts Budget and Policy Center suggests fears about outmigration are overblown or at least built on data that that points to “inconsistent” conclusions. Several hours later, industry leaders raised concerns about that very topic while unpacking the Bay State’s summertime tumble in one set of business competitiveness rankings.

Kurt Wise, a senior policy analyst at MassBudget, wrote that different datasets show varying population changes, making it too murky to draw a clear conclusion about migration patterns.

The most recent data from the U.S. Census Bureau show a slight increase in population, about 18,700 people, from July 2022 to July 2023, Wise said. That includes a net gain from migration of 11,500 people, not a net decrease.

Other data available from the Internal Revenue Service show that about 157,000 people left Massachusetts in 2021, compared to 112,000 people who came to the state that year, according to Wise.

“In short, the picture that can be drawn from available official data is inconsistent, though in any case, it is not one of crisis,” he wrote. “Nevertheless, migration data often is used — and misused — to push an agenda of tax cuts for very high-income households, the ultrawealthy, and large corporations. Cutting such taxes, however, would do nothing to help most people who choose to leave Massachusetts. Instead, it would deprive the Commonwealth of much-needed revenue that otherwise could be used to address challenges that likely are a factor in some people’s decision to leave the state.”

Based on the IRS data, Wise said 55 percent of the people who left Massachusetts in 2021 were between the ages of 26 and 45 years old. Employers and state leaders view that demographic as key because they can put down roots for decades to come as both workers and as taxpayers.

About one in six people who departed the Bay State in 2021 earned more than $200,000, Wise said.

“Again, tax cuts for very high-income households are not a policy prescription that aligns with the income demographics of Massachusetts outmigration,” Wise wrote.

Migration patterns and competitiveness have become key topics on Beacon Hill, fueled by the sky-high costs of housing and child care pressuring many residents.

While she has repeatedly called for action to address those issues, Gov. Maura Healey has also been touting Massachusetts as a national leader. Her office recently compiled more than half a dozen lists where the Bay State fares well, most from personal finance company WalletHub. That includes Massachusetts earning the spot of top state to live in and best public school system in the country.

Business groups and their allies have pointed to other metrics where Massachusetts fares poorly, including the Tax Foundation’s 2024 State Business Tax Climate Index report, to argue that legislators and the Healey administration need to change course.

CNBC in July published its latest annual rankings of top states for businesses, which showed Massachusetts falling from 15th in 2023 to 38th in 2024 — the lowest the Bay State has ranked since the metric launched in 2007, according to rankings creator Scott Cohn.

The business news network grades states on more than 120 metrics across 10 categories: infrastructure, workforce, economy, quality of life, cost of doing business, technology & innovation, business friendliness, education, access to capital, and cost of living. Analysts adjust how those categories are weighted over time.

Cohn said 2024 was the first year that infrastructure (where Massachusetts earned a D grade and ranked 44th among all states, down from 34th in 2023) was the top-weighted category.

“We figure that [infrastructure] has a lot to do with all of the government money that’s out there, between the Bipartisan Infrastructure Law, the Chips and Science Act, the Inflation Reduction Act, all of this money that’s out there that states and companies want a piece of,” Cohn said Tuesday at a virtual event hosted by the Massachusetts High Technology Council. “When we talk about infrastructure, we’re talking about not just roads and bridges, [but also] broadband, utilities, the population that’s accessible within a day’s drive, and also … the sites that are available for development, and particularly shovel-ready sites.”

CNBC rated Massachusetts poorly on workforce (F grade, ranked 38th), economy (D grade, ranked 40th), cost of doing business (F grade, ranked 49th), business friendliness (D+ grade, ranked 40th) and cost of living (F grade, ranked 48th). The network also sang praises for the Bay State on technology and innovation (A+ grade, ranked third) and education (A+ grade, ranked second), while giving solid grades on quality of life (B grade, ninth ranked) and access to capital (B+ grade, ninth ranked).

Asked by hosts of Tuesday’s event how the Bay State could simultaneously earn excellent marks for education and a bad score for workforce, Cohn said it largely comes down to population movement impacting the pool of available employees.

“It seems like people are still moving to the state because population is growing, but too many people, and particularly too many working-age educated people, are leaving,” he said.

Cohn declined to speculate on how the new surtax (which took effect in 2023) might be affecting data on people leaving Massachusetts.

“I don’t have data on that, but when we’re looking at workforce and we’re looking at migration, we’re basically looking at the whole ‘butts in seats’ thing. The workers that companies really prize, which is college-educated and graduated-educated and so on, these workers, what are they doing?” he said. “In the data that we have, there are some coming in, but a lot are leaving.”

State House News Service and MASSterList will convene their own discussion of residential movement patterns and competitiveness on Thursday. Economic Development Secretary Yvonne Hao will offer the keynote address, and Mass. Taxpayers Foundation President Doug Howgate delivers a presentation ahead of panel discussions.