A few hundred miles of land and 30 counties make up the long border between Tennessee and Kentucky. The states have the same terrain, and virtually the same culture, but considerably different tax structures and economic outcomes.
Many of the individuals who live in the sixteen Kentucky counties share anecdotes about the growth they’ve witnessed on the opposite side of the border, sometimes to the detriment of their home counties. We took a look at some of the data to see if their stories aligned. Calculations of wealth migration and increases along the border gave us gut wrenching results.
Between 1992 and 2015, according to IRS and Census data, the Tennessee counties along the Kentucky border gained nearly $2 billion in annual wealth ($1,963,700,000) as a result of migration trends. During that same time period, Kentucky counties actually LOST wealth, decreasing by $496,425,000 in annual adjusted gross income (AGI).
Not all of Tennessee’s growth has been at Kentucky’s direct expense, though a great deal of it has. In the time period we looked at, more than 18,000 Kentucky households moved south to Tennessee, taking more than $700 million in annual AGI with them. Only Florida has gained more from Kentucky out migration.
Tennessee has gained both population and wealth from states all over the country, with its biggest gains coming from California, Illinois, and Michigan (all heavily taxed states) which contributed more than $1 billion of annual AGI each in wealth migration to Tennessee’s rapidly growing economy.
Of the 16 Kentucky counties, seven experienced positive wealth migration (43.75%) and the remaining nine experienced decreases. Trigg County leads the way having gained more than $67 million, with the largest contributor being their neighbor to the east, Christian County. Christian County has lost more than $535 million in annual AGI by itself, by far the biggest loser along the border. Approximately a third of the wealth that has migrated out of Christian County went to two Tennessee Counties, Montgomery and Davidson.
By contrast, of Tennessee’s 14 border counties, ten of them, or 71.4%, experienced positive wealth migration. Whereas only one Kentucky county had an increase above $50 million in annual AGI, seven Tennessee counties were above that number, with one, Summer County, above $1 billion.
One must be careful about drawing too many conclusions from the data, but one thing is quite clear: when people move to the Tennessee-Kentucky border, they usually choose to settle in Tennessee, just as nearly 800 Kentucky households also do each year.