Don’t worry, the South is still booming

OPINION:

Anyone who understands real estate knows it’s all about three things: location, location, location. In recent decades, many of the hottest locations in the country have been in Dixie. Much of this growth has come at the expense of the Northern states. In the last several decades, the North has lost more than 5 million residents and hundreds of billions of dollars of economic activity to the low-tax and business-friendly Southern states. 

Miami, Dallas, Charlotte and Nashville are the happening cities, replacing struggling places like Chicago, Hartford, New York, Baltimore and Providence.  We would urge people to go to our friend Travis Brown’s wonderful book “How Money Walks,” which shows the places Americans are moving to and from.  

But now we are told by liberal think tanks and the media that the South’s ascent has stalled out. The Wall Street Journal recently announced in a front page headline: “The South Is Falling Behind.” After several decades of speedy development, things have supposedly changed. Over the last decade, the WSJ says, the southeast “recorded the country’s slowest growth in output and wages … and the highest unemployment rate.” The implication is that low tax rates don’t work anymore as a magnet.  

Not so fast. These kinds of stories don’t take into account that the South isn’t monolithic. Some Southern states have low tax rates and others don’t. The four states with the best economic climate — Florida, North Carolina, Tennessee and Texas — are all high-flyers, thank you. Three of these four, have no personal income tax and the 4th, North Carolina, has cut its income tax sharply.  

These big four in the South have attracted 3.04 million net new residents from other states over just the past decade. That’s a 4.6 percent rise in population due to net migration from other states. Does that sound like a decline?

Contrast that performance with the four states of the apocalypse — Illinois, New Jersey, New York and Connecticut. This group is in the worst fiscal condition in the nation, they are losing residents every day and they have among the highest taxes and the most anti-business policies.  

These states lost 2.8 million people (6 percent of the population) over the past decade to other states and if you go to Texas or Florida you will meet lots of rich and middle class residents who came from one of these four states. Naples, Florida, for example, is now nicknamed Chicago South, because so many former windy city families now live there more than six months of the year.   

The big four in the South saw a 10.5 percent gains in jobs from 2007-17. The four northern states gained a meager 2.5 percent. For every job in these high tax state, the low tax states attracted four.

Over the last decade home values in the high-flying Southern states were up an average or 10 percent. In the loser states of the North home values fell. The loss of jobs and population and is now being reflected in declining home values in these Northern states. Nowhere is this collapse in home prices more evident than in Connecticut, where a cascade of tax increases have led to an exodus of millionaires. So much for the benefits of progressivism. 

All these rumors of a southern slump are highly misleading. Florida, North Carolina, Tennessee and Texas are following a winning economic formula of low tax rates; right to work laws; business-friendly regulatory climate; and low costs. Anyone who thinks the boom in Dixie has ended needs to travel to places like Raleigh and Tampa and Houston and Chattanooga and see what’s happening with their own two eyes. 

• Stephen Moore, a columnist for The Washington Times, is a senior economic consultant at Freedom Works and Clara Hathorne is a research intern at Heritage Foundation.