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Analysis: New Castle County Losing Affluent Residents

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John Stapleford
John holds a Ph.D. in urban and regional economics (University of Delaware), M.A. in government and planning (Southern Illinois University) and B.S. in chemistry (Denison University). He is director of the Center for Economic Policy and Analysis for the Caesar Rodney Institute and a professor emeritus of economic development from Eastern University. He most recently worked as an associate director and senior economist with Moody’s Economy.com. John was Director of the Bureau of Economic Research at the University of Delaware and the co-founder of the Delaware Small Business Development Center. He is author of a book, numerous articles in professional journals, and over one hundred applied research monographs.

The IRS compiles aggregate data on personal income tax returns and, among other things, shows the movement of household adjusted gross income (AGI) among counties. The latest data, 2015-16, paints a divergent tale for Delaware’s most northern and southern counties.

Between 2015-16 net out-migration from New Castle County reduced the County’s total personal income by more than $177 million (-1.1% of total income). The average AGI of households moving into the County was $65,700 while the average AGI for households moving out of the County was $78,600. The majority of the net loss occurred from the streams of U.S. citizen households moving from state to state.

 

The poor quality of New Castle County public schools certainly played a role among educated professionals with children as the average AGI of households moving out to Chester County, Pennsylvania was $122,700. These households represented that largest group of state-to-state migrants.

A home in the Wawaset Park community in Wilmington

Retirement at the beach was a factor with the AGI of households moving to Sussex County was $87,300 compared to the New Castle County overall AGI average of $80,400. And retirement to Florida showed an AGI of households moving to Palm Beach County of $127,600 compared to an average of $38,600 for households moving from Palm Beach to New Castle County.

On the other extreme, money was walking into Sussex County. Between 2015-16 net in-migration boosted Sussex County AGI by $297 million, an increase to total AGI of almost 6%.

The average AGI of households moving in was $79,800 compared to an average of $46,200 for households moving out. Among the households moving into Sussex County, those with the highest average AGI came from Worcester, Delaware and Chester counties…households who may previously have been renters at the Sussex County beaches.

 

The net difference in average AGI for households moving into and out to Worcester County, Maryland was approximately $100 thousand. Yet there was virtually no difference in the average AGI of those households moving into and out to Palm Beach County, Florida.

Until the State Government addresses public education reform, New Castle County’s leakage of personal income will not abate. For Sussex County, continued success requires State government to leave in place the current favorable tax treatment of Social Security income and continuance of no sales tax.

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