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For more information:
Ryan Horton, M.U.P. Senior Researcher Public Policy Forum 414-276-8240
Income drain highlights Chicago’s value to M7 Milwaukee region loses $1.3 billion
MILWAUKEE, Wisconsin – Release date: Friday, November 9, 2007 – A new Public Policy Forum study has found that households moving out of the Milwaukee region from 2001-2006 took with them $1.3 billion more in personal income than newcomers to the region brought in.
The report estimates the income drain has resulted in $105 million in lost tax revenue and thus a greater tax burden on those who remain in the region. But it also shows that the region is a big beneficiary of income moving from the Chicago area. In fact, southeastern Wisconsin’s only income gain comes from northern Illinois. Plus, Chicagoans brought with them higher average annual incomes ($47,880) than Wisconsinites who moved into southeastern Wisconsin ($34,124).
“It’s obvious that the more Chicagoans know about southeastern Wisconsin, in terms of lower housing costs, better schools, fewer traffic hassles, etc., the better chance the region has of attracting even more personal income from northern Illinois,” says Senior Researcher Ryan Horton, of the Milwaukee-based Forum, principal author of the study.
Sources of net personal income gain to the region include Lake, Cook, McHenry, DuPage, Will, and Kane counties in northern Illinois. Those six counties represented almost $400 million in income coming to the region during the period, 2001-2006.
Only Kenosha and Walworth counties in southeastern Wisconsin experienced net personal income gains last year. Kenosha attracted more than $30 million and Walworth was far behind at a little more than $3.2 million.
The primary beneficiary of the region’s income loss has been the rest of Wisconsin ($491 million), particularly the counties immediately ringing southeastern Wisconsin ($211 million), including Rock, Jefferson, Dodge, Fond du Lac, and Sheboygan counties. Other top beneficiaries of the region’s income drain include Florida ($328 million), Arizona ($132 million), and Minnesota ($62 million).
“The income drain to the rest of Wisconsin appears to be the natural migration of people who move farther out because of quality-of-life considerations,” says Horton. “Much of the other drain is from retirees to the Sunbelt.”
Of the regions studied for the report, only the Phoenix area had a net income gain, of 1.6%, last year. Arizona’s Maricopa County (in which Phoenix is located) was the biggest recipient of southeastern Wisconsin income, at $107 million.
The Chicago and Minneapolis-St. Paul areas lost 1.0% ($2 billion) and 0.7% ($518 million), respectively, of their total personal incomes. The Madison area almost broke even, but still lost 0.1% in personal income Southeastern Wisconsin’s loss was 0.9%.
“It’s difficult to find a region with a large city as its hub that doesn’t lose personal income to the Sunbelt or to less developed, more bucolic areas,” says Horton. “With our region, however, it’s clear that closer ties with northern Illinois are to southeastern Wisconsin’s advantage.”
Income data for the study came from the Internal Revenue Service and the U.S. Census Bureau. The Forum’s report and news release can be found at www.publicpolicyforum.org.
Milwaukee-based Public Policy Forum – which was established in 1913 as a local government watchdog – is a nonpartisan, nonprofit organization dedicated to enhancing the effectiveness of government and the development of southeastern Wisconsin through objective research of regional public policy issues.
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