Where do people go when they leave California and why?

The Big Shrink that started in 2020 hasn't stopped, and there are myriad draws to other states, from politics to finances.

The top-line number was eye-opening: About 725,000 people moved out of California in 2020 to set up new lives in one of the 49 other states or Washington, D.C.

If that were the end of it, the number – derived from the Internal Revenue Service’s Migration Data for 2021 – would’ve represented the biggest single-year exodus in state history.

But it wasn’t the end of it. While experts say the reasons are more nuanced than the gross outflow of a single year, California’s population has been shrinking steadily since 2020. Recent state data shows California’s population today is a little under 39 million, after flirting with 40 million just four years ago.

A lot of other new data shows where people are going (Texas, Idaho and Florida, as well as neighboring Arizona and Nevada). Polling reports show who is leaving (higher-income, well-educated workers recently started to join a migration pattern that traditionally has been dominated by lower-income movers). And yet other data shows at least some of the financial and social challenges causing problems in California (rising home prices, stagnant wages, crime) aren’t so different in states wooing the most ex-Californians.

“I didn’t think I’d miss it. And, in a lot of ways I was right; I don’t,” said a laughing Debbie Higbee, who last year moved from Burbank to Boise, Idaho, with her husband and their three children.

“But I’m not one of those people who hate California, either,” she added. “I don’t really understand all that.

“For me, it’s fine there. And it’s not like things are perfect here, either. Both places have good and bad.”

Blip or trend?

That 725,000-person exodus was a top-line number, not a net. But California’s actual domestic migration in 2020 – with the state losing about 331,000 more people than it got back from the other states – was bracing, even to people who track this stuff closely.

“Yeah, that was big,” said political scientist Eric McGhee, a senior fellow at the Public Policy Institute of California and co-author of a blog about state politics, demographics and other issues related to California’s population.

But McGhee, echoing others who study California, was quick to add: “It was not surprising. For at least the last 30 years, California has exported more people to other states than we have imported.”

In fact, McGhee’s blog, tracked month-to-month data last year and found that from July 2021 to July 2022 California lost about 407,000 people to other states – almost certainly the biggest such shift in state history.

“There have been a handful of years in the past few decades where we had a net gain, but the typical outcome is we lose people,” McGhee said.

But, most years, it’s also been typical for outgoing domestic migration to be offset by incoming international immigration, with more people moving into California from around the world than those decamping to Texas and Idaho and the like. That wasn’t the case in 2020.

And, most years, the state’s population hasn’t been shocked by a pandemic-induced rise in deaths and a corresponding drop in births. And, most years, thousands of employers in the state didn’t impose massive layoffs for a relatively brief period, then rehire at a breakneck pace and, finally, decide to let millions of workers do their jobs from home – no matter where that home might be. All of that happened in the first year of the pandemic.

Bottom line: California’s population didn’t just grow more slowly in 2020 than it had previously, it actually contracted by nearly 359,000. That happened again in 2021, as California shrank by 114,000 people.

Then the pandemic ended but California’s population decline did not.

According to data released this month by the California Dept. of Finance, the shrink carried into last year, with the state losing about 139,000 people. State officials now estimate California’s population is about 38,940,231, the first time it’s been under 39 million since 2015.

All of which raises a question: Blip or trend?

“The state is projecting growth is going to resume,” McGhee said.

In the past year, immigration has started to pick up, and pandemic deaths have abated. But birth rates haven’t yet fully recovered, and a rise in something once unexpected – office workers telecommuting from out of state – has made the growing number of ex-Californians, like Higbee and her family, even more important.

“Net domestic migration offset population gains from natural increase and international migration,” the California Dept. of Finance wrote in its May 1 report on the state population.

That said, as McGhee noted, the state has projected population growth will resume as early as next year, and that by 2030 the population could top 42 million.

“We’ll see,” McGhee said.

Greener grass?

Several years of polling from the Public Policy Institute and others have found people moving away from California offer similar reasons – house prices, family and jobs.

And, for many conservatives, politics.

A PPIC survey from last year found 56% of people who said they disapprove of Gov. Gavin Newsom also said they want move out of California, versus 28% of Newsom supporters who said the same thing. That mirrors what’s been underway nationally for much of this century, as people move to be near people of similar political beliefs, a trend some demographers term “the big sort.”

Yet “move to” data suggests politics is a motive for some, but not all.

The IRS migration report from 2020 found that the most popular state for ex-Californians, by far, is conservative Texas. It also found deeply red Idaho ranked fourth for ex-Californians and currently red Florida ranked fifth.

But the second biggest draw was Arizona, which voted for Democrat Joe Biden in 2020 and is generally viewed as a mixed state, politically. Same for third-place Nevada (also mixed, politically). What’s more, the only three counties nationally that drew more than 1,000 Californians in 2020 — Maricopa County, Arizona (Phoenix), Clark County, Nevada (Las Vegas) and King County, Washington (Seattle) – all have more registered Democrats than Republicans.

Higbee, who moved from Burbank to Boise last year said politics had nothing to do with their move.

“I’m actually not a fan of the politics here. It’s kind of crazy. But I wasn’t always a fan of the politics in California, either,” she said.

“I kinda wish it wasn’t a thing at all.”

Instead, the Higbees move was about home prices and because her husband could keep his job by working from home as long as he commutes back to California once a quarter.

Data shows the April median home price in Higbee’s new county, Ada, Idaho, was $492,000, versus about $1.1 million in her old hometown, Burbank.

“We could change our lives,” Higbee said. “So we did.”

But long-term data compiled by USA Facts, using information from the Bureau of Labor and the Federal Housing Finance Agency, shows that life-changing property values might not last forever.

Since 2015, home prices in Ada, Idaho have jumped 136% while wages have increased 44%. During the same period in Los Angeles County, home prices rose 68% and wages rose 36%. And, on a state level, the gap between home prices and wages has grown wider in all five states wooing the most Californians than it has in California.

Another factor – for the Higbees and, if data is to be believed, hundreds of thousands of others – is taxes.

Three of the five biggest move-to states for Californians (Texas, Nevada and Florida) have no state personal income tax, and two others (Idaho, flat 5.8% and Arizona, flat 2.5%) are lower than the personal state income tax for some in California, which ranges from 1% to 12.3%.

But personal income tax is only part of the picture. When factoring in various other ways states pull money out of their residents – including everything from property and sales taxes to licensing fees – all of the move-to states try to offset their lack of income tax, according to a report from the Census Bureau. California’s overall tax burden ranks highest, at 9.2% of the average income, but Nevada, 8.3%, Texas, 8.2%, Idaho, 7.9%, Arizona, 7.7% and Florida, 6.7%, are all within shouting distance.

Still, if the Higbees represent the future in any way, it might be because of their experience as a state-to-state telecommuter.

McGhee said it’s too early to know how big a deal long-distance telecommuting played in recent migration patterns, but it might be a drain on California’s population going forward.

“Historically, the people most likely to leave California were lower income. That tells you their move had something to do with the cost of living, mostly due to housing,” McGhee said.

“But what changed during the pandemic was that high-income people also started to leave. And a lot of them did it because they could still keep their California jobs.

“That’s a big chunk of this acceleration in domestic migration,” he added.

“It might be in the future, too.”