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The Fiscal Costs of Maine’s “Demographic Winter”. J. Scott Moody Chief Executive Officer The Maine Heritage Policy Center. Demographic Winter—The Movie. www.DemographicWinter.com. What is Demographic Winter?. A country needs a birthrate of 2.13 children just to keep population stable. - PowerPoint PPT Presentation
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J . S C OT T M O O DYC H I E F E X EC U T I V E O F F I C E R
T H E M A I N E H E R I TA G E P O L I C Y C E N T E R
The Fiscal Costs of Maine’s “Demographic Winter”
What is Demographic Winter?
A country needs a birthrate of 2.13 children just to keep population stable.
In Europe it is 1.3, Russia it is 1.17, and Japan 1.25Russia is already losing over 750,000 people per
year and the total population of 140 million will fall by one-third by 2050
Thus, a declining number of births and consequent shrinking number of children is the first sign of Demographic Winter
Demographic Winter has Arrived in Maine
0.88
0.93
0.98
1.03
1.08
1.13
1.18
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Inde
x Va
lue
Year, as of July 1
Chart 1Maine's Population By Age Cohort
July 1, 2000 to July 1, 2011
Under 18 years18 to 64 years65 years and over
18%
6%
-11%
Source: U.S. Department of Commerce: Census Bureau and The Maine Heritage Policy Center
Cause of Maine’s Demographic Winter
10,500
11,500
12,500
13,500
14,500
15,500
16,500
17,50019
91
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Peop
le
Year, as of July 1
Chart 2Maine's Births and DeathsJuly 1, 1991 to July 1, 2011
Births DeathsSource: U.S. Department of Commerce: CensusBureau and The Maine Heritage Policy Center
Cause of Maine’s Demographic Winter
0
1,000
2,000
3,000
4,000
5,000
6,00019
91
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Peop
le
Year, as of July 1
Chart 3Maine's Net Natural (Births minus Deaths)
July 1, 1991 to July 1, 2011
Source: U.S. Department of Commerce: CensusBureau and The Maine Heritage Policy Center
Rumford
GrandLake StreamPlantation
Cause of Maine’s Demographic Winter
(6,000)
(4,000)
(2,000)
0
2,000
4,000
6,000
8,000
10,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
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2008
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2011
Peop
le
Year, as of July 1
Chart 4Maine's Net Domestic Migration
July 1, 1991 to July 1, 2011
Source: U.S. Department of Commerce: CensusBureau and The Maine Heritage Policy Center
Cape Elizabeth
HighlandPlantation
Cause of Maine’s Demographic Winter
1,230,000
1,250,000
1,270,000
1,290,000
1,310,000
1,330,000
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
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2011
Popu
latio
n
Year, as of July 1
Chart 5Maine's Population
July 1, 1991 to July 1, 2011
Source: U.S. Department of Commerce: CensusBureau and The Maine Heritage Policy Center
It Gets Worse at the County-Level
Natural Population ChangeIn 2011
11 counties, in red, had 775 more deaths than births
5 counties, in green, had 995 more births than deaths
State-wide = 180
It Gets Worse at the County-Level
Domestic MigrationIn 2011
10 counties, in red, had lost 1,781 people
6 counties, in green, gained 1,853 people
State-wide = 72
It Gets Worse at the County-Level
Total Population ChangeIn 2011
11 counties, in red, lost 1,513 people
5 counties, in green, gained 2,322 people
State-wide = 809
Economic Costs
On the margin, the shift from population growth to population decline is a complete 180 degrees . . .
Businesses can no longer expect to gain new customers
Businesses can longer expect to keep existing customers
As such, businesses face a double-whammy losing both 1 potential and 1 existing customer
Shrinking revenue is an economic depression
Fiscal Costs—Spending
Fiscal Costs—Taxes
Fighting Maine’s Demographic Winter
Maine must become a strong in-migrant state again
If the income tax is going to suffer the most, policymakers should proactively eliminate it
No income tax helps businesses and familiesNew Hampshire proves the point with a much
higher level of in-migration over the last two decades (69,487 vs. 23,948) and, consequently, a higher rate a natural population growth (3,017 vs. 180 in 2011).
