Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
A recent analysis of tax data during the pandemic revealed an alarming truth: Marion County experienced a decrease of almost half a billion dollars in adjusted gross income, with surrounding counties picking up much of the cash leaving the Circle City.
The local migration is part of a national trend. The Economic Innovation Group, which conducted the analysis, found that taxable income in large urban counties decreased more than $68 billion from 2020 to 2021.
Here in central Indiana, two suburban counties benefited most from the $490 million outbound migratory trend: Hancock County saw a $76 million increase (4.4%), and Boone County saw a $69 million increase (3.4%).
The pandemic turned things topsy-turvy in myriad ways, and younger folks were already heading from city centers back to the suburbs before the virus hit, but these numbers make it clear the exodus is happening faster than expected.
Skyrocketing housing prices and the increasing ability to work from anywhere appear to be the main roots of the trend.
A recent Fannie Mae study found that affordability was a big consideration for both renters and homeowners when it comes to making their next move. In 2014, 21% of renters listed it as a top concern; in 2023, that number has risen to 46%. Homeowners saw an 11 percentage-point increase in concern, from 19% in 2014 to 30% in 2023.
With more and more employers allowing remote or hybrid work, employees are able and willing to rent or buy homes farther from in-person offices. Ball State University economist Michael Hicks recently noted that, in 2019, Indiana had 60,000 or fewer remote employees; that figure is now over a million Hoosiers—almost a third of the workforce—working at least one day from home.
Here’s the catch: Of those who are working remotely, Hicks said about 9% make $35,000 per year. That’s in stark contrast to the two-thirds of remote workers earning $200,000 or more.
The migration out of cities like Indianapolis is sweeping up high earners, creating even more dramatic implications for budgetary bottom lines.
That leads to two obvious questions: First, can we get those workers back?
During the pandemic, the city of Greensburg offered $7,000 in cash and gifts for remote workers to relocate there. Half a dozen other Indiana cities offered similar incentives, and many of those programs are still in place. Perhaps something similar would work for Indianapolis.
Are there ways to include incentives other than cash in a recruitment package? With an eye toward repurposing increasingly empty office buildings, are there ways the city could work with developers to subsidize housing for remote workers for a period of time?
If we can’t recruit and retain at the same rate we’re losing tax dollars to the suburbs, we need to ask ourselves what this new financial reality means and what adjustments we might need to make either to live within our post-pandemic budget or to increase the sharing of tax dollars within central Indiana to ensure sustainable economic success across the region.
With the migratory trend looking like it’s here to stay for quite some time, it’s better to have this conversation now than wait a few more years until the situation becomes dire.•
__________
Chartier is a lifelong Indianapolis resident and owner of Mass Ave Public Relations. Send comments to ibjedit@ibj.com.
Click here for more Forefront columns.
Please enable JavaScript to view this content.