South Carolina has emerged as the fastest-growing state in the United States in terms of internal migration of American citizens. According to the most recent data from the Internal Revenue Service (IRS), the state welcomed approximately 59,000 new residents from across the country between 2022 and 2023, accounting for just over one percent of its total population of 5.57 million.
Percentage Gains Outpace Larger States
While Texas and Florida attracted larger raw numbers of migrants—each drawing a little more than 110,000 Americans—their percentage gains were smaller due to their significantly larger populations. Texas has a population of 31.7 million, while Florida has 23.3 million. In contrast, South Carolina's percentage increase outpaced all other states.
Exodus from New York and California
Meanwhile, New York and California experienced substantial outflows of residents. New York lost nearly 160,000 Americans from 2022 to 2023, while California saw a loss of just over 200,000. The IRS migration data, based on tax returns filed, provides detailed insights, including family sizes. South Carolina saw approximately 29,000 more tax returns filed, resulting in a taxable income boost of over $4.1 billion for the state.
Economic Impact on South Carolina
This influx likely contributed to South Carolina's healthy state budget in fiscal year 2023-2024. Governor Henry McMaster has highlighted large budget surpluses in recent years. The state recorded a record budget surplus totaling over $3.8 billion in unexpected revenue, according to the Governor's Executive Budget for that year. For fiscal year 2025-2026, South Carolina continues to enjoy a healthy surplus of $1.8 billion.
Budget Challenges for New York and California
In contrast, New York and California face projected multi-billion dollar budget deficits. California lost around 100,000 tax filers from 2022 to 2023, representing a taxable revenue decline of about $12 billion. New York lost approximately 72,000 tax filers, leading to a revenue decline of just under $10 billion. According to the California Legislative Office, the state is contending with a $3 billion shortfall for the upcoming fiscal year. New York State Comptroller Thomas DiNapoli has projected a cumulative budget deficit of $34.3 billion through fiscal year 2029, citing waning pandemic relief funds and increased reliance on tax revenue.
New York City's Fiscal Strain
New York City, which contributes nearly 55 percent of the state's total tax revenue and about 60 percent of its income tax stream, faces its own budget shortfall. City Comptroller Mark Levine has projected a deficit of $2.2 billion in 2026 and $10.4 billion in 2027. Levine remarked that this is the first time since the Great Recession that the city faces a budget shortfall of this magnitude.
More than half of New York's tax revenue comes from personal income tax, making the state particularly vulnerable to continued outmigration of filers. As residents leave, the state's budget challenges are likely to intensify.
