A U-Haul moving van sits outside a Boston home. A new Pioneer Institute study says 71,000 people moved out of Massachusetts thanks in part to the flexibility of remote work. iStock photo

So much for the Millionaires Tax, which was supposed to be a game-changer in raising revenue for local schools and the perpetually struggling MBTA.

Activists who led the successful 2022 Millionaires Tax referendum were surely exchanging high-fives this spring, with estimates that the surcharge on seven-figure incomes would bring in an $1.8 billion haul.

But a pair of studies, one just out from the Pioneer Institute, the other released this spring by a Boston University professor, suggest the revenue bump will be relatively fleeting.

A surge of higher-earning professionals and business owners, among others, have bailed on the Bay State in the wake of the pandemic and the rise of remote work, taking with them billions in annual income, according to a report released this month by Pioneer.

Youngest, Wealthiest Are Leaving

Massachusetts saw 71,000 residents pack up and leave between 2020 and the end of 2022, according to “Mass Out-Migration: Outflux of Wealth and Residents Continues.”

Eighty percent of those leaving the state made over $100,000 a year, with those making over $200,000 a year accounting for more than half of the exodus.

Worse yet, these are not retirees that are leaving, with younger professionals, business owners and others in the 26-to-34-year-old age range making up the largest group by earnings departing the state.

All told, those leaving Massachusetts took with them nearly $11 billion in annual income as well between 2020 and 2022, with nearly $4 billion leaving the state in 2022 alone.

That, in turn, represents the loss of about $200 million in tax revenue.

While that’s alarming enough, even more concerning is what those numbers say about the current trajectory in terms of residents and tax dollars fleeing Massachusetts.

That $11 billion in adjusted gross income that left Massachusetts over that three-year period was just a little more than the $10 billion the state lost over bulk of the 2010s.

Could We Lose Nearly 100K Residents Per Year?

If the Pioneer study shows that that the exodus of residents and dollars is accelerating, the BU study that came out earlier this year shows just where we may be headed.

Authored by Mark Williams, a BU business professor and former president of the Boston Economic Club, the study offers a sobering forecast.

By 2030, Massachusetts could be hemorrhaging 96,000 residents – and more than $19 billion in adjusted gross income – each year.

That, in turn, would amount to a $1 billion in lost tax revenue annually as well.

It doesn’t take too much imagination to grasp the implications should that trend extend into the 2030s.

By the middle of the next decade, any gain from the Millionaires Tax could be completely wiped out by the ongoing exodus of residents and wealth from the state.

Cost of Living a Major Factor

The top destinations? New Hampshire and Florida, both of which don’t have state income taxes.

“The decision to move out of state is not one most people or businesses take lightly, nor is it likely due to a single tax or issue,” wrote Aidan Enright, Pioneer’s economic research associate and the report’s author. “Such monumental changes are the culmination of a series of events—and a loss of trust. Thus, it is imperative that states losing residents and businesses take a hard look in the mirror to assess what is going wrong and seek to re-right the ship.”

That said, the relentless rise in the cost of living in Massachusetts has helped push some residents to leave, with the state having some of the highest housing and health care costs in the country, to name just two major stressors.

Massachusetts is also not doing itself any favors on the tax policy front, what with the passage of the Millionaires Tax a couple years ago and one of the highest estate taxes in the country, the Pioneer report notes.

But all these cost factors and tax issues have been a source of concern and discontent for years now.

What has changed has been the rise of remote work, which has suddenly enabled tech workers and other professionals to relocate to other states and regions and still hang onto their well-paying jobs back in Massachusetts, Enright said.

“You can get more bang for your buck – you are making a Boston wage with the cost of living of a much more affordable state,” Enright said. “That is a pretty good bargain to make.”

Scott Van Voorhis is Banker & Tradesman’s columnist and publisher of the Contrarian Boston newsletter; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.