Why some cities are growing and others shrinking.
Stansel, Dean
Over the last three decades, large cities like Pittsburgh, Detroit,
Cleveland, Buffalo, and Toledo have seen their populations shrink, while
areas like Houston, Atlanta, Dallas, Tampa, and Phoenix have seen their
populations grow rapidly. Examining the policy differences between
high-growth and low-growth areas can provide evidence that may help
declining cities reverse their fortunes.
In 1980, Austin, Texas, and Syracuse, New York, were roughly the
same size. The Austin metro area had a population of about 590,000, and
the Syracuse metro area had about 643,000 residents. By 2007,
Austin's population had increased by more than 1 million while
Syracuse's population had been stagnant. That same disparity exists
when one examines the growth of employment and real personal income.
Another disparity between the two areas is the tax burden. State and
local taxes accounted for nearly 13 percent of personal income in
Syracuse but only about 9 percent in Austin. Although there are numerous
factors that can influence the growth of individual economies, one finds
a consistent relationship between low taxes and high economic growth in
metropolitan areas, in states, and in nations.
This article details that relationship between taxes and growth for
the 100 largest U.S. metropolitan areas. In the 10 highest-tax metro
areas, the state and local tax burden accounted for about 12.4 percent
of personal income. In those same areas, population grew by 21.3 percent
from 1980 to 2007, employment grew by 40.1 percent, and real personal
income grew by 75.5 percent. In contrast, taxes were only 8.3 percent of
personal income in the 10 lowest-tax areas. The economic growth in those
areas was much faster. Population grew by 64.4 percent, employment by
107.6 percent, and real personal income by 157.3 percent.
The contrasting experiences of Austin and Syracuse occurred in
countless other areas as well. This article provides 14 additional
examples of pairs of metro areas that had similar tax and growth
patterns. (1) The experiences of all 15 pairs of metropolitan areas
provide valuable lessons for distressed areas everywhere. Keeping tax
burdens low appears to be an important ingredient in the recipe for
economic prosperity. If high-tax, low-growth metro areas like Detroit,
Milwaukee, Buffalo, and Syracuse want to be more like high-growth areas
such as Dallas, Tampa, San Antonio, and Austin, they should lower their
onerous burden of taxation and bring spending reader control.
Taxes, Economic Growth, and Prosperity
In 1776, Adam Smith wrote An Inquiry into the Nature and Causes of
the Wealth of Nations. Economists have been busily examining the issue
ever since. It is one of the most widely studied topics in the field of
economics. One of the most common findings relates to how economic
activity is organized. For example, capitalist countries (those in which
economic activity occurs on the basis of voluntary exchange within
private markets) tend to grow faster than socialist countries (those in
which economic activity is organized by government). The existence of
private property rights in capitalist countries helps create stronger
incentives for individuals to be productive. As a result, factors of
production (including labor and capital) tend to flow out of socialist
countries and into capitalist countries. The economic collapse of the
Soviet Union and other bastions of socialism provide ample evidence of
that.
Starting in the 1980s, Nobel economist Milton Friedman played an
important role, along with many other economists and public policy
experts, in the development of an index of economic freedom that would
allow researchers to be able to measure the degree to which a country
had a free market economy. Those efforts culminated in the Fraser
Institute's publication in 1996 of the first edition of Economic
Freedom of the World. There have been 14 more editions published since
then in what is now an annual series. Large volumes of research have
illustrated a positive relationship between economic freedom at the
national level and economic growth. One of the problems for economists
examining that relationship is that there are many other factors that
can influence growth, and those factors can vary widely across a broad
selection of nations. For example, there are large differences in
religion, cultural, and other institutional factors. Those types of
factors are very difficult to quantify, thus our ability to account for
their influence on the process is quite limited.
One way to avoid that problem is to look at sub-national
jurisdictions. For example, the 50 U.S. states have much less variation
in religion and culture than do two nations such as the United States
and China. In 2002, the Fraser Institute produced its first edition of
the Economic Freedom of North America, which provided an index of
economic freedom in U.S. states and Canadian provinces (see Karabegovic
and McMahon 2008). (2) Because smaller jurisdictions share a more common
set of cultural institutions, it is easier for researchers to accurately
examine the relationship between economic freedom and economic growth.
There is growing evidence that states with higher economic freedom and
lower taxes are more prosperous, even when the effects of many other
growth-related factors are incorporated. (3)
Examining states addresses some of the challenges inherent in using
national data, but not all of them. The boundaries of states and
provinces are relatively arbitrary and some local economies cross them.
For example, the Washington, D.C., metropolitan area includes counties
in Maryland, Virginia, and West Virginia. There are more than 30 other
metro areas that cross state boundaries and a few cross national
boundaries. San Diego's metro area is on the U.S.-Mexican border,
while Buffalo's is on the U.S.-Canadian border. Furthermore,
economic conditions can vary widely within those boundaries, Conditions
in Dallas's metro area are quite different from those in the
Lubbock and Amarillo metro areas a few hours to the west. Using the
local economy as the unit of analysis helps to address the problems
related to using nations or states. In the United States, the
metropolitan area is a county-based concept designed to reflect the
boundaries of local labor markets or local economies.
Although there is no economic freedom index for metropolitan areas,
there are data available on taxes and spending. One of the most
important components of the various economic freedom indices is the tax
burden. Taxes remove resources from private decision-makers and put them
in the hands of elected officials and bureaucrats. The latter face much
weaker incentives to use those resources efficiently and lack the
information to be able to do so. As a result, jurisdictions with higher
tax burdens will tend to have less prosperous economies. Furthermore,
high-tax areas will tend to be less attractive to residents and
businesses. Because people and employers are mobile, high taxes will
discourage in-migration and encourage out-migration. The literature
examining local jurisdictions is limited. However, there is growing
evidence that localities with higher taxes--and larger government in
general have less prosperous economies, even when the effects of many
other growth-related factors are incorporated. (4)
Taxes and Economic Growth in the 100 Largest U.S. Metropolitan
Areas
To test the hypothesis that high-tax areas have less prosperous
economies, one can observe data on taxes and economic growth for the 100
largest metro areas in the United States that is, those with 2007
populations over 575,000--during the last three decades. The tax data
measure total state and local taxes as a percentage of personal income.
The local tax data are collected by the U.S. Census Bureau's Census
of Governments every five years. The state average is then added to the
local figure to provide for more valid comparisons across states. (5) To
track changes in the tax burden over time, we can take the average of
the tax burden for 1977, 1982, 1987, 1992, 1997, and 2002. Economic
growth is measured by the change from 1980 to 2007 in population,
employment, and real personal income. For consistency each metro area is
defined as it was for 2009 (see U.S. Office of Management and Budget
2008).
The data for the largest 100 metro areas show that areas with low
taxes do indeed tend to grow faster than those with high taxes. As
Figure 1 shows, this is true no matter how growth is measured.
Population growth from 1980 to 2007 was three times higher in the 10
lowest-tax metro areas than in the 10 highest-tax areas. In those same
areas, employment growth was more than two and a half times higher and
real personal income growth was twice as high. Table 1 provides the data
for each of those 20 metro areas. Five of the 10 lowest-tax areas are in
Florida or Texas, states that do not tax personal income. Three others
are in Tennessee, which only taxes dividend and interest income. The
seven highest-tax areas are all in New York, which has one of the
highest state income taxes in the nation. New York City, the highest tax
area, has its own local income tax in addition to the state tax.
Figure 2 shows that there is a negative correlation between state
and local taxes and employment growth in the 100 largest metro areas.
The correlation coefficient is -0.405. Similarly, for real personal
income growth the correlation with taxes is -0.374 and for population
growth it is -0.346. While correlation does not prove causation, if
taxes were not a drag on economic growth we would expect to see positive
correlations. Furthermore, it should be noted that the tax data slightly
lag the growth data. Using average tax burden for 1977-2002 and growth
over 1980-2007 helps strengthen our results.
Another way to examine the issue is to sort the metro areas by
growth rather than by tax burden and then look at tax burdens in
high-growth and low-growth areas. The data for the largest 100 metro
areas show that areas with high growth tend to have lower taxes than
those with low growth. Figure 3 illustrates that this relation holds
true for all three measures of growth. The 10 metro areas with the
lowest population growth from 1980 to 2007 had about a 13 percent higher
state and local tax burden than the highest population growth areas. Tax
burdens were 19 percent higher in the areas with the lowest employment
growth and about 15 percent higher in those with the lowest growth of
real personal income. Table 2 details the tax and growth data for the
highest and lowest population growth areas. Six of the 10 highest-growth
areas are in three states with no personal income tax (Florida, Nevada,
and Texas). All 10 of the lowest-growth metro areas are in the
higher-tax Northeast or Midwest regions of the country.
[FIGURE 2 OMITTED]
Taxes and Economic Growth in Selected Pairs of U.S. Metropolitan
Areas
Since residents and businesses are mobile, they have the ability to
vote with their feet (Tiebout 1956) by locating in their most desired
jurisdiction. Metro areas with tax burdens that are much higher than
others with whom they compete will tend to have less prosperous
economies. To more closely/examine this issue, we focus on 15 selected
pairs of metro areas. Each pair contains one area with relatively low
taxes and high growth and one with relatively high taxes and low growth.
The metro areas within each pair have roughly similar population size
either in 1980 or 2007. The first set was chosen from among the 100
largest metro areas (those with 2007 population greater than 575,000)
regardless of geographic location. The second set consists of pairs of
metro areas within the same state or in nearby states.
Table 3 provides the tax and economic growth data for seven pairs
of large metro areas. The Dallas metro area had about 300,000 fewer
residents than Detroit in 1980, but now it is twice as large. The
Detroit metro area has seen its population decline by 15 percent,
employment fall by 12 percent, and real incomes grow by less than 2
percent, while its tax burden has increased by 25 percent. Furthermore,
while Texas does not levy a tax on personal income, residents of Detroit
pay both a state personal income tax and a local personal income tax.
Residents of Tampa, San Antonio, Jacksonville, Austin, and Orlando
also do not pay a personal income tax. In Nashville, the state taxes
interest and dividend income only. In contrast, residents of Milwaukee,
Buffalo, Gary, Syracuse, Santa Ana, and Rochester do pay state income
taxes. The combined state and local tax burdens in those areas were as
much as 50 percent higher than similarly sized low-tax areas, and
economic growth in those high-tax areas was substantially lower.
In Milwaukee, the tax burden is about 40 percent higher than in
Tampa. While the two areas were about the same size in 1980, Tampa is
now about 75 percent larger. Population in Tampa has grown six times
faster, employment has grown four times faster, and real personal income
has grown more than twice as fast.
Buffalo and San Antonio were close to the same size in 1980, but
taxes have been more than 50 percent higher in Buffalo than in San
Antonio. While Buffalo has actually lost population since 1980, San
Antonio has grown by 71 percent. Employment has grown 10 times faster in
San Antonio and real personal income has grown six times faster.
In 1980, Rochester, New York, was larger than Nashville, Tennessee.
Now, after seeing its population grow about 11 times faster, Nashville
is nearly 50 percent larger. Employment and real personal income have
each grown about four times faster in Nashville. Residents in
slower-growth Rochester have faced a tax burden about 44 percent larger.
In 1980, the Austin and Syracuse metro areas were roughly the same
size. Austin had a population of about 590,000, compared to about
643,000 in Syracuse. By 2007, Austin's population had grown by more
than 1 million while Syracuse's population had grown by only 1,000.
That same disparity exists when one examines the growth of employment
and real personal income. State and local taxes accounted for 12.6
percent of personal income in Syracuse but only 9.2 percent in Austin
over the 1980-2007 period.
Orlando, Florida, and Santa Ana, California, share at least one
thing in common: they both have Disney theme parks. However, the tax
burden in Santa Ana has been 17 percent higher than in Orlando, and
Orlando's growth has been twice as fast.
Table 4 focuses on pairs of metro areas that are in relatively
close geographic proximity. As Tables 1 and 2 illustrated, some of the
lowest-tax and highest-growth areas in the United States are in Florida
and Texas. However, as the first two pairs indicate, even within those
two low-tax states, conditions can vary quite widely. The tax burden in
Miami is about 14 percent higher than in Tampa. Employment in Tampa has
grown twice as fast, while population and real personal income have
grown 50 percent faster.
Killeen and Beaumont are medium-sized metro areas in Texas, each
with about 375,000 residents in 2007. The state and local tax burden in
Beaumont has been about 37 percent higher and its population has grown
by less than 1 percent since 1980. In contrast, lower-tax Killeen has
seen 63 percent population growth. Employment has grown about three
times faster in Killeen than in Beaumont, and real personal income has
grown almost five times faster.
Clarksville, Tennessee, and Huntington, West Virginia, are also
medium-sized metro areas. In 2007, each had about 275,000 residents.
However, residents in Huntington have faced a 44 percent higher tax
burden. That area has seen population decline by 9 percent since 1980.
In lower-tax Clarksville, population has grown by 55 percent. Employment
has grown more than four times faster in Clarksville and real personal
income has grown nearly six times faster.
Another high-tax area in West Virginia is Charleston, the state
capital. Compared to Columbia, the state capital of nearby South
Carolina, taxes are about 17 percent higher in Charleston. While
lower-tax Columbia has seen its population grow by 43 percent since
1980, Charleston has actually seen its population decline by 9 per-cent.
Employment and real personal income have both grown about four times
faster in Columbia.
McAllen, Texas, and El Centro, California, are both on the
U.S.-Mexican border. However, taxes in El Centro have been about 17
percent higher. Lower-tax McAllen has seen population grow twice as
fast, while employment and real personal income have both grown more
than three times faster.
Fort Myers, Florida, and Savannah, Georgia, are both coastal areas.
In 1980, Savannah was slightly larger, but now Fort Myers has nearly 80
percent higher population. Employment has grown more than twice as fast
in Fort Myers, and real personal income has grown nearly three times
faster. Residents of Savannah have laced a tax burden nearly 10 percent
higher.
Conclusion
Over the last three decades, many of our nation's largest
metropolitan areas have seen their populations stagnant or declining.
Others have seen rapid growth. The question of why some areas are
growing and others are shrinking is of major importance to public policy
debates. What the evidence of the last three decades has shown is that
metro areas with higher taxes have tended to have slower growth of
population, employment, and income. There are dearly numerous other
important factors that influence economic growth, and the correlation
between taxes and growth found herein do not prove that lower taxes
cause higher growth. Nevertheless, my findings are consistent with
previous findings for states and nations in studies that do account for
other determinants of growth.
These findings have clear policy implications for local politicians
(and for those at all levels of government). Economic prosperity is more
likely to occur if tax burdens are kept low, especially relative to
neighboring areas. To do so requires a strong emphasis on spending the
taxpayers' resources wisely. However, that is no different than
what private businesses must do. Just as businesses must keep costs low
in order to successfully compete with other businesses for customers,
governments must keep spending and taxes low in order to successfully
compete with other governments for mobile residents and businesses.
This conclusion is especially true in periods of economic downturn
when taxpayers are especially sensitive to the various costs of living.
If high-tax, low-growth metro areas like Detroit, Milwaukee, Buffalo,
and Syracuse want to be more like high-growth areas such as Dallas,
Tampa, San Antonio, and Austin, they should lower their onerous burden
of taxation and bring spending under control.
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(1) These correlations do not prove that low taxes have caused the
economic growth. There are many other factors that have an important
influence on economic growth. For example, Walters (2010) provided
evidence of the negative relationship between unionization of the local
labor market and city growth. Incorporating those factors is beyond the
scope of this article. See Stansel and Swaleheen (2010) and the
additional articles by myself and others cited in footnotes 3 and 4 for
articles that do take account of other factors.
(2) In addition, the Pacific Research Institute has produced a
state-level index, U. S. Economic Freedom Index (McQuillan, Huang, and
McCormick 2004), and in 2009 the Mercatus Institute produced a broader
state index, Freedom in the 50 States: An Index of Personal and Economic
Freedom (Sorens and Roger 2009).
(3) See, for example, Vedder (1990), Bartik (1991), Becsi (1996),
Wasylenko (1997), Crain and Lee (1999), Kreft and Sobel (2005), Ashby
(2007), Campbell and Rogers (2007), Ashby and Sobel (2008), Hall and
Sobel (2008), Reed (2008).
(4) See, for example, Bradbury, Downs, and Small (1982); Dalenberg
and Partridge (1995); Crihfield and Panggabean (1995); Holcombe and
Lacombe (2004); Higgins, Levy, and Young (2006); Stansel, Gohmann, and
Hobbs (2008); Stansel (2009); and Stansel and Swaleheen (2010).
(5) In the case of metro areas that cross state boundaries, the
state tax burden for the state with the largest central city in that
area was the one used.
Dean Stansel is an Associate Professor of Economies in the Lutgert
College of Business at Florida Gulf Coast University in Fort Myers. He
thanks Edward J. Lopez, Jeff Noble, and an anonymous referee for useful
suggestions.
TABLE 1
LOW-TAX METRO AREAS GREW FASTER THAN HIGH-TAX METRO AREAS
State and Local
Taxes as a 1980-2007 Growth in:
Percentage of
Ten Lowest-Tax Large Personal Income,
Metro Areas 1977-2002 Average Population Employment
Jacksonville, 7.9% 75.1% 118.2%
FL MSA
Bradenton-Sarasota- 8.0 93.1 158.6
Venice, FL MSA
St. Louis, MO-IL, 8.2 19.3 68.2
MSA
Colorado Springs, GO 8.2 89.8 120.8
MSA
San Antonio, TX MSA 8.3 70.8 107.7
Knoxville, TN MSA 8.3 34.3 80.3
Tampa-St. 8.4 66.9 126.3
Petersburg-
Clearwater, FL MSA
Nashville-Davidson- 8.4 66.1 109.8
Murfreesboro-
Franklin, TN MSA
Memphis, TN-MS-AR 8.5 28.2 59.9
MSA
Fort Worth- 8.6 100.8 125.9
Arlington, TX
MD
Low-Tax Area Average 8.3% 64.4% 107.6%
Ten Highest-Tax
Large Metro Areas
New York-White 14.0% 14.7% 25.2%
Plains-Wayne, NY-NJ
MD
Nassau-Suffolk, 13.9 9.9 41.2
NY MD
Syracuse, NY MSA 12.6 0.2 24.7
Buffalo-Niagara 12.5 -9.2 10.5
Falls, NY MSA
Poughkeepsie- 12.2 32.2 49.8
Newburgh-
Middletown, NY MSA
Rochester, NY MSA 12.1 6.1 26.9
Albany-Schenectady- 11.8 10.3 40.4
Troy, NY MSA
Milwaukee-Waukesha- 11.7 10.5 30.1
West Allis, WI MSA
Bakersfield, GA MSA 11.6 93.7 81.7
Minneapolis-St. 11.5 44.9 70.2
Paul-Bloomington,
MN-WI MSA
High-Tax Area 12.4% 21.3% 40.1%
Average
100 Largest Metro 10.0 51.0 80.0
Area Average
Real
Ten Lowest-Tax Large Personal
Metro Areas Income
Jacksonville, 192.7%
FL MSA
Bradenton-Sarasota- 221.1
Venice, FL MSA
St. Louis, MO-IL, 81.0
MSA
Colorado Springs, GO 187.8
MSA
San Antonio, TX MSA 166.7
Knoxville, TN MSA 102.2
Tampa-St. 152.2
Petersburg-
Clearwater, FL MSA
Nashville-Davidson- 180.6
Murfreesboro-
Franklin, TN MSA
Memphis, TN-MS-AR 107.9
MSA
Fort Worth- 180.8
Arlington, TX
MD
Low-Tax Area Average 157.3%
Ten Highest-Tax
Large Metro Areas
New York-White 102.3%
Plains-Wayne, NY-NJ
MD
Nassau-Suffolk, 86.9
NY MD
Syracuse, NY MSA 45.3
Buffalo-Niagara 27.2
Falls, NY MSA
Poughkeepsie- 94.8
Newburgh-
Middletown, NY MSA
Rochester, NY MSA 44.6
Albany-Schenectady- 74.6
Troy, NY MSA
Milwaukee-Waukesha- 59.7
West Allis, WI MSA
Bakersfield, GA MSA 90.4
Minneapolis-St. 128.8
Paul-Bloomington,
MN-WI MSA
High-Tax Area 75.5%
Average
100 Largest Metro 129.4
Area Average
TABLE 2
HIGH-GROWTH METRO AREAS HAD LOWER TAXES THAN LOW-GROWTH
METRO AREAS
State and Local 1980-2007 Growth in:
Taxes as a
Percentage of Population Employment
Personal Income,
1977-2002 Average
Ten Highest-
Population-Growth
Large Metro Areas
Las Vegas-Paradise, 9.3% 289.5% 344.2%
NV MSA
Cape Coral-Fort 9.0 182.7 225.7
Myers, FL MSA
Austin-Round Rock, 9.2 170.1 222.1
TX MSA
Riverside-San 10.4 158.6 191.9
Bernardino-Ontario,
CA MSA
Phoenix-Mesa- 10.1 158.4 197.7
Scottsdale, AZ MSA
Raleigh-Cary, NC MSA 9.6 158.2 184.5
Orlando-Kissimmee, 8.7 149.5 217.7
FL MSA
McAllen-Edinburg- 8.8 146.2 202.1
Mission, TX MSA
Atlanta-Sandy 9.6 124.8 146.2
Springs-Marietta, GA
MSA
West Palm Beach-Boca 8.9 115.2 173.2
Raton-Boynton Beach,
FL MD
High-Growth Area 9.4% 165.3% 210.5%
Average
Ten Lowest-
Population-Growth
Large Metro Areas
Detroit-Livonia- 11.3% -14.8% -11.5%
Dearborn, MI MD
Pittsburgh, PA MSA 9.8 -11.0 17.3
Buffalo-Niagara 12.5 -9.2 10.5
Falls, NY MSA
Cleveland-Elyria- 10.2 -3.6 16.2
Mentor, OH MSA
Toledo, OH MSA 9.6 -1.0 25.9
Syracuse, NY MSA 12.6 0.2 24.7
Dayton,, OH MSA 9.5 1.0 17.4
Gary, IN MD 10.1 2.2 15.1
Philadelphia, PA MD 10.5 5.4 28.5
Akron, OH MSA 9.5 5.9 39.4
Low-Growth Area 10.6% -2.5% 18.4%
Average
100 Largest Metro 10.0 51.0 80.0
Area Average
1980-2007
Growth in:
Real
Personal
Income
Ten Highest-
Population-Growth
Large Metro Areas
Las Vegas-Paradise, 442.7%
NV MSA
Cape Coral-Fort 364.5
Myers, FL MSA
Austin-Round Rock, 329.6
TX MSA
Riverside-San 191.0
Bernardino-Ontario,
CA MSA
Phoenix-Mesa- 247.5
Scottsdale, AZ MSA
Raleigh-Cary, NC MSA 323.2
Orlando-Kissimmee, 262.6
FL MSA
McAllen-Edinburg- 238.3
Mission, TX MSA
Atlanta-Sandy 235.3
Springs-Marietta, GA
MSA
West Palm Beach-Boca 290.7
Raton-Boynton Beach,
FL MD
High-Growth Area 292.6%
Average
Ten Lowest-
Population-Growth
Large Metro Areas
Detroit-Livonia- 1.5%
Dearborn, MI MD
Pittsburgh, PA MSA 38.0
Buffalo-Niagara 27.2
Falls, NY MSA
Cleveland-Elyria- 31.0
Mentor, OH MSA
Toledo, OH MSA 26.6
Syracuse, NY MSA 45.3
Dayton,, OH MSA 32.4
Gary, IN MD 33.8
Philadelphia, PA MD 81.7
Akron, OH MSA 51.4
Low-Growth Area 36.9%
Average
100 Largest Metro 129.4
Area Average
TABLE 3
SELECTED PAIRS OF SIMILARLY-SIZED METRO AREAS
Population
2007 1980 Growth,
Metro Area Population Population 1980-2007
Dallas-Plano-Irving, TX MD 4,128,967 2,032,153 103.2%
Detroit- Livonia-Dearborn, 1,981,654 2,326,366 -14.8%
MI MD
Tampa-St. Petersburg- 2,715,273 1,626,975 66.9%
Clearwater, FL MSA
Milwaukee-Waukesha-West 1,543,378 1,396,659 10.5%
Allis, WI MSA
San Antonio, TX MSA 1,984,921 1,161,968 70.8%
Buffalo-Niagara Falls, 1,126,513 1,241,275 -9.2%
NY MSA
Nashville-Davidson- 1,520,160 915,182 66.1%
Murfreesboro-Franklin,
TN MSA
Rochester, NY MSA 1,032,488 972,728 6.1%
Austin-Round Rock, TX MSA 1,592,590 589,582 170.1%
Syracuse, NY MSA 643,974 642,764 0.2%
Jacksonville, FL MSA 1,297,813 741,394 75.1%
Gary, IN MD 697,731 682,734 2.2%
Orlando-Kissimmee, FL MSA 2,028,669 813,225 149.5%
Santa Ana-Anaheim- 2,976,742 1,948;067 52.8%
Irvine, CA MD
State
Real & Local
Personal Taxes as a
Employment Income of Income,
Growth, Growth, 1977-2002
Metro Area 1980-2007 1980-2007 Average
Dallas-Plano-Irving, TX MD 116.8% 199.5% 9.1%
Detroit- Livonia-Dearborn, -11.5% 1.5% 11.3%
MI MD
Tampa-St. Petersburg- 126.3% 152.2% 8.4%
Clearwater, FL MSA
Milwaukee-Waukesha-West 30.1% 59.7% 11.7%
Allis, WI MSA
San Antonio, TX MSA 107.7% 166.7% 8.3%
Buffalo-Niagara Falls, 10.5% 27.2% 12.5%
NY MSA
Nashville-Davidson- 109.8% 180.6% 8.4%
Murfreesboro-Franklin,
TN MSA
Rochester, NY MSA 26.9% 44.6% 12.1%
Austin-Round Rock, TX MSA 222.1% 329.6% 9.2%
Syracuse, NY MSA 24.7% 45.3% 12.6%
Jacksonville, FL MSA 118.2% 192.7% 7.9%
Gary, IN MD 15.1% 33.8% 10.1%
Orlando-Kissimmee, FL MSA 217.7% 262.6% 8.7%
Santa Ana-Anaheim- 92.3% 129.1% 102%
Irvine, CA MD
TABLE 4
SELECTED PAIRS OF METRO AREAS IN THE SAME OR NEARBY STATES
Population
2007 1980 Growth,
Metro Area Population Population 1980-2007
Tampa-St. Petersburg- 2,715,273 1,626,975 66.9%
Clearwater, FL MSA
Miami-Miami Beach-Kendall, 2,382,961 1,643,132 45.0%
FL MD
Killeen-Temple-Fort Hood, 370,755 227,951 62.6%
TX MSA
Beaumont-Port Arthur, TX MSA 376,448 374,797 0.4%
Clarksville, TN-KY MSA 261,8'49 168,672 55.2%
Huntington-Ashland, WV-KY- 283,943 311,271 -8.8%
OH MSA
Springfield, MO MSA 419,607 259,555 61.7%
Wichita, KS MSA 595,321 469,410 26.8%
Columbia, SC MSA 715,678 499,796 43.2%
Charleston, WV MSA 303,656 335,152 -9.4%
McAllen-Edinburg-Mission, 705,478 286,540 146.2%
TX MSA
El Centro, CA MSA 160,830 92,584 73.7%
Indianapolis-Carmel, IN MSA 1,692,737 1,209,920 39.9%
Louisville-Jefferson County, 1,232,304 1,054,368 16.9%
KY-IN MSA
Cape Coral-Fort Myers, FL MSA 588,129 208,050 182.7%
Savannah, CA MSA 329,307 231,691 42.1%
State &
Real Local
Personal Taxes as a
Employment Income of Income,
Growth, Growth, 1977-2002
Metro Area 1980-2007 1980-2007 Average
Tampa-St. Petersburg- 126.3% 152.2% 8.4%
Clearwater, FL MSA
Miami-Miami Beach-Kendall, 59.9% 99.2% 9.6%
FL MD
Killeen-Temple-Fort Hood, 82.9% 162.1% 7.1%
TX MSA
Beaumont-Port Arthur, TX MSA 20.7% 27.6% 9.8%
Clarksville, TN-KY MSA 75.6% 150.0% 7.2%
Huntington-Ashland, WV-KY- 14.0% 21.8% 10.3%
OH MSA
Springfield, MO MSA 105.7% 131.7% 7.6%
Wichita, KS MSA 36.8% 75.1% 9.1%
Columbia, SC MSA 73.6% 129.0% 9.2%
Charleston, WV MSA 18.4% 35.3% 10.8%
McAllen-Edinburg-Mission, 202.1% 238.3% 8.8%
TX MSA
El Centro, CA MSA 54.5% 73.6% 10.3%
Indianapolis-Carmel, IN MSA 72.1% 105.6% 9.3%
Louisville-Jefferson County, 48.7% 84.3% 10.4%
KY-IN MSA
Cape Coral-Fort Myers, FL MSA 225.7% 364.5% 9.0%
Savannah, CA MSA 93.2% 129.4% 9.9%
FIGURE 1
LOW-TAX METRO AREAS HAD HIGHER ECONOMIC GROWTH
Percentage Change 1980-2007
10 Lowest-Tax 10 Highest-Tax
Metro Metro
Areas Areas
Population 64% 21%
Employment 108% 40%
Real Personal 157% 75%
Income
Note: Table made from bar graph.
FIGURE 3
HIGH-GROWTH METRO AREAS HAD LOWER TAXES
State and Local Taxes as a Percentage
of Income, 1977-2002 Average
10 Highest-Growth 10 Lowest-Growth
Metro Metro
Areas Areas
Population Growth, 9.4% 10.6%
1980-2007
Employment Growth, 9.2% 11.0%
1980-2007
Real Personal Income 9.3% 10.7%
Growth, 1980-2007
Note: Table made from bar graph.
