Retiree out-migration is growing concern

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By NATE JENKINS / Lincoln Journal Star

After more than 40 years on the production line of a major manufacturer and in an office at the University of Nebraska, Dorothy Hense is like a lot of people in the early stages of retirement: She wants to get away.

In the parlance of retirement, getting away traditionally has conjured up thoughts of vacation and places like Hawaii, or RV campgrounds with demographics similar to those of Sun Belt cities.

Increasingly, however, the term has a different definition, one that is illustrated by Hense’s destination wish list. Instead of weeks or months in Arizona, the Rocky Mountains or Florida, Hense is considering a permanent move to a place with less high-profile neighbors — Missouri or Kansas perhaps. In those places, she is convinced, the taxes aren’t so high.

Hense, who is widowed, recently moved to an apartment in Lincoln and says she may have to sell her house because of property taxes.

“You can’t buy a new car in Nebraska without being overtaxed,” she added.

There is no hard data that shows retirees are fleeing Nebraska at a higher rate than in the past, but those who track them and keep an eye on economic development worry there may be something to the notion. And they’re doing everything from digging for evidence beyond the anecdotal to imagining advertising campaigns to draw retirees back.

“We’re hearing these claims, and we’d like to find out if they’re true,” said Mark Intermill, an executive with AARP Nebraska.

At the very least, a combination of factors has drawn more attention to the issue in recent months.

The campaign for a cap on state spending has driven talk of whether the state’s tax climate is too oppressive for retirees, for example, said Intermill.

And Dave Nabity, who finished third in the race for the Republican gubernatorial nomination in May, made the issue of retirees leaving the state a linchpin of his campaign, saying it is why he ran in the first place.

Nabity, who has a financial advising company, said he latched onto the issue because “the number of people who came into our office and said, ‘We’re moving,’ was staggering.”

On the campaign trail, the high-energy Nabity became known for rapid-fire explanations of detailed charts he said showed how the tax burden on retirees in Nebraska is much heavier than in other states.

“Nobody’s tracking this,” he said recently. “When people leave the state, they don’t put an ad in the paper saying, ‘Hey, we’re going.’”

The decades-long refrain of statistics that attach hard data to what many can easily observe — that many rural areas of the state are loosing their footing — has helped cement a recognition that population loss is a crisis, and one not easily overcome. Yet much of the focus has been on the out-migration of younger people — largely because of their importance to the labor force but, possibly, also because of an assumption that retirement-aged residents could be counted on to stay.

Now, said state Director of Economic Development Richard Baier, retirees and those approaching retirement age — namely Baby Boomers — are more mobile. Recognizing that, and worried that more retirees are leaving, state officials are playing with the idea of ad campaigns targeted at the older set.

During a meeting last week, Baier asked for ideas on ad campaign. The ideas tended to highlight the low-stress environment of Nebraska and its simple pleasures. One envisioned a picture of man in a tree stand, possibly hunting deer, with the slogan, “I don’t have to commute anymore.” Another, “California has stars — so do we.”

Baier’s department also is trying to encourage businesses to offer work schedules friendly to seniors who want to work part-time.

The size of the population they are trying to accommodate is substantial. Census estimates from last year showed about 233,550 people 65 and older live in Nebraska.

Other census figures released last year, while not a sure indicator more retirees are leaving the state, at least fuel the question. Between 2000 and 2004, there were population gains in five of the seven age categories beginning with age 55. The most significant gains were among people 55 to 59 — plus 17,685 — and 60 to 64 — plus 7,950.

There were also modest gains in the three age sets that begin with 70 and end at death. But there were dips in the two categories in the above-55 crowd that are often associated with early retirement.

About 2,450 fewer people aged 65 to 69 lived in the state in 2004 than in 2000, and about 1,900 fewer people in the 70 to 74 group.

Among politicians, the most popular culprit of retiree out-migration is the state’s tax climate. For those looking to back the blame with numbers, the effort required can be limited to browsing short news alerts posted on major Web sites.

One of the more recent fire-starters was a story from CNNMoney.com that relayed information from the Tax Foundation. It showed that Nebraska’s state and local tax burden is sixth-highest in the country. Such rankings tend to buttress the impressions of people like Hense.

AARP Nebraska’s Intermill called the ranking “spurious” because it relies too heavily on estimates. Other studies show Nebraska also ranks high on the tax burden it places on retirees.

Figures that Intermill and others, including staff of the state’s Revenue Committee, find more credible show Nebraska closer to the middle of the pack. Although Intermill disputes studies showing Nebraska is one of the most heavily taxed states in the country, he agrees the state is at a disadvantage when it comes to taxes that target retirees. Some states, he said, don’t tax Social Security benefits; Nebraska does. The same, he said, is true for military retirement benefits.

A leading national expert on retirees and their tendencies believes theories that large numbers of retirees and those close to retirement age make residency decisions based on where they can get the lightest tax load are overblown. Such states as Louisiana have not had much luck luring retirees with tax breaks, said economist and consultant Gene Warren.

Instead, new retirees and Baby Boomers about ready to closet their wingtips for good are more often motivated to move where they can squeeze the most life and activity out of their remaining years, said Warren. While their parents “wanted to move to a warm place to wait and die,” the new crop of retirees “are much more active ... they have no idea they’re ever going to die. They’re looking to do whatever they want.”

That attitude may not position Nebraska as a big-market destination for retirees because the state lacks such natural amenities as mountains, the ocean, large swaths of public lands to explore.

So, is Nebraska doomed to lose both its young and old?

Not necessarily. Warren believes ad campaigns such as the one being pondered in state offices may be on the right track.

“Nebraska is never going to be able to go after retirees, but it can do a lot to retain the ones it has,” he said. “Remind them why they’re living here in the first place.”

Reach Nate Jenkins at 473-7223 or njenkins@journalstar.com.