This article was published on the New Haven Register on July 7, 2018
Population growth rose slightly in most Northeast and New England states between 2010 and 2017, but growth was far more robust in the Southern states over the period, according to the U.S. Census Bureau. Sure, weather may have had something to do with it, but the popular belief is that cost of living is a more important factor. But is it really less expensive to live down South?
The short answer is yes, and several Midwestern states are even more affordable than Dixie.
First let’s look at the facts on population change. Census Bureau figures show the following changes from 2010 to 2017:
United States: up 5.5 percent.
Connecticut: up 0.4 percent.
Vermont, down 0.3 percent.
New York, up 2.4 percent.
Pennsylvania, up 0.8 percent.
New Jersey, up 2.4 percent.
Massachusetts, up 4.8 percent.
Rhode Island, up 0.6 percent.
New Hampshire, up 2 percent.
South Carolina, up 8.6 percent.
North Carolina, up 7.7 percent.
Texas, up 12.6 percent.
Georgia, up 7.6 percent.
Tennessee, up 5.8 percent.
Florida, up 11.6 percent.
Every Northern state fell below the national average, and most Southern states exceeded it (Arkansas, West Virginia and Mississippi fell below the national average).
From July 1, 2016, to July 1, 2017, of the 10 fastest-growing states six were in the Southeast and four were out West, in terms of numeric growth. (Percentage growth told a different story, with the top 10 all from the West except for Florida, Texas and the District of Columbia.)
So now let’s look at cost of living. No matter the source or the subject, the North tends to dominate the upper ranks of any cost measure and the South and Midwest generally rate among the most affordable regions.
For example, the Cost of Living Index for the first quarter of 2018, from the Missouri Economic Research and Information Center, lists eight Southern states among the 10 with the lowest cost of living (the other two were Michigan and Kansas).
Among the bottom 10, i.e., the least affordable states, were Connecticut (number 43), Vermont, New York, New Jersey, Rhode Island and Massachusetts. The index is based on the cost of groceries, housing, utilities, transportation and health care.
U.S. News and World Report magazine’s “Best States for Affordability” survey tells a similar story, with five Southern and five Midwestern states at the top and five Northern states among the bottom 10, including Connecticut at number 41.
Finally, let’s look at property taxes. According to the Tax Foundation, every New England state is among the top 10 states with the highest per capita property tax rates, with Connecticut at number 3, behind only New Jersey and New Hampshire. Among the bottom 10? North Carolina, Tennessee, Alabama (number 50), Arkansas, Oklahoma and Louisiana.
A lower cost of living translates into a better chance to maintain your lifestyle in retirement. Connecticut residents have to spend a higher percentage of their income, whether fixed or not, on housing, taxes and other expenses. So for some people, it’s not only the sunshine driving them to pack up and head south.
Eric Tashlein is a Certified Financial Planner professional and founding Principal of Connecticut Capital Management Group LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or through www.connecticutcapital.com. This is for informational purposes only and should not be construed as personalized investment advice or legal/tax advice. Please consult your advisor/attorney/tax advisor. Registered Representative, Securities offered through Cambridge Investment Research Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors Inc., A Registered Investment Advisor. Cambridge Investment Research Inc., and Connecticut Capital Management Group LLC are not affiliated.