Skip to content

Yay, NY slips back into last place! The most unfriendly tax state and worst business environment / Also NYS debt 2nd highest nationally / And, are you better off then 4 years ago? – less NYer’s think so

October 12, 2012

New York Ranked Last in Business Tax Climate

A survey of the panoply of taxes levied by government places New York dead last in the climate for small business, according to a survey by the tax foundation.
That’s the reason you see an entire industry is what is called ‘economic development’. Agencies and law firms trading tax abatements in an effort to create the illusion NY is a good place to do business. The downside is that it masks the ambient climate for those businesses and individuals not granted the largesse.
Abatements on things like sales tax and property tax have the result of more regressivity for those left paying such taxes. Yet if you don’t do it, the mantra becomes ‘what are you doing to create jobs ?’
States like NY have created an endless scenario of the dog chasing its own tail.

50th-place state tax ranking stings New  Yorkers

Cuomo official calls study biased in favor of flat tax

By Rick  Karlin, • 518-454-5758 • @RickKarlinTUThursday, October 11, 2012

ALBANY — The Washington, D.C.-based Tax  Foundation made some waves earlier in the week when it handed New York a  last place spot in its national rankings of the tax-friendly, or unfriendly  states.

“New York scores at the bottom,” concluded the report.

The state Business  Council shot back on Tuesday, hours after New York’s 50th-place ranking,  saying that the survey overlooked the strides Gov. Andrew  Cuomo has made in improving the business climate, including a 2 percent cap  on property taxes.

“This report does not reflect the progress New York has made in its budget  and tax policy over the past two years,” said Business Council President and CEO Heather  Briccetti.

Then on Thursday, Cuomo’s secretary, Larry  Schwartz, responded by saying the survey was biased and put too much  emphasis on income and other taxes and not enough on the property tax burdens,  which often trump other costs in New York.

“They basically took a bunch of data sets and manipulated them to fit their  worldview, which is based upon a flat tax, not a progressive tax, which we have  in New York state,” Schwartz said during an interview on Talk 1300 radio with  host Fred  Dicker.

He noted the conservative, non-partisan Tax Foundation supports the concept  of a flat tax, as opposed to a progressive tax where higher earners pay a larger  percentage of their incomes.

“If they had bothered to look at the taxes, they would have known that New  York businesses pay over five times as much in property taxes to localities as  they do in income taxes,” added Schwartz.

He said that businesses in the Empire State pay $443 per employee in  corporate income taxes while they pay $2,300 per employee in property taxes.

The foundation does put more weight on income taxes than property taxes, said  economist Scott  Drenkard, who worked on the survey.

But that’s because there is more variability in income tax rates between the  states and the idea of the survey is to point out the competitive differences,  he said.

For property taxes, he said, the rates are similar in most places — except  for New York and New Jersey, which are in a class of their own since the taxes  are so high.

“It’s more tightly clustered,” he said of property tax rates in the other 48  states.

The off-the-charts property tax rates in New York and New Jersey are borne  out in the numbers, said Drenkard, who agreed with Schwartz’s $2,300 per person  property tax cost to business.

He said that was basically a per capita calculation that looked at the cost  spread out over the entire state’s population of 19.4 million people, pitted  against the total amount of property tax dollars that are paid each year.

(Tax department figures show that in 2009, the latest year for which full  data was available, $44 billion in property taxes were paid: $26 billion by  residential owners and $16 billion by businesses).

Schwartz had other problems with the survey. He scoffed at some of the  top-ranked states, such as third place Nevada (Wyoming, with no income taxes and  lots of oil and gas revenue, took the top spot for business-friendly tax  environments).

Even though Nevada looks good on taxes, Schwartz pointed to its 14 percent  unemployment rate, compared to 9 percent in New York.

“I’d rather be in New York and not in Nevada,” Schwartz said.

Drenkard noted Cuomo hasn’t been shy about using his organization’s rankings  in the past — in his 2011 State of the State speech he alluded to New York’s  poor rating (they were also in last place at the time) in pointing to the need  for change.

“He didn’t have a problem with it then, but I guess he has a problem with it  now,” Drenkard said, alluding to Cuomo.


DiNapoli: State spent $6,859 per NYer last year, state debt equals $3,253 per NYer (2nd highest nationally)

Oct 12, 2012   |  Jon Campbell Albany Bureau

ALBANY — The state spent $6,859 per resident last fiscal year while cutting its total spending by $1.3 billion, according to the state Comptroller’s Office.

Including federal funds, the state spent $133.5 billion in the fiscal year ending March 31 — a 1 percent decrease from the previous year, an annual financial report from Comptroller Thomas DiNapoli found.

But since 2008, state spending increased by 15 percent, about twice the rate of inflation. State debt totaled $63.3 billion last year — about $3,253 per resident, according to DiNapoli’s office.

“State policy decisions in the past two years have made budgetary balance a primary goal, but challenges still remain,” DiNapoli said in a statement. “The challenge is to build on the progress made and put New York State on a truly sustainable fiscal path.”

All told, 68 percent of the state’s spending went to cover education and health costs, according to the report.

Medicaid costs, for example, have increased steadily since the 2008-09 fiscal year, from $32.8 billion to $41.4 billion last year. The state spends more per pupil on primary and secondary education, according to DiNapoli, spending $18,618 during the 2009-10 school year.



Are NYers better off than four years ago? More say ‘No’

10:53 AM, Oct 12, 2012   | Joseph Spector Albany Bureau Chief
<!–individual: 8 numChar :2003 –>

ALBANY — Forty-seven percent of New Yorkers said they are worse off now than they were four years ago, compared to 37 percent who said they are better off today, according to a Siena College poll Friday.

The poll of 621 state residents found that voters felt their finances were in worse shape than in 2008, the last presidential election. When asked about their savings and their income versus expenses, a plurality of voters – 40 percent in both cases – said they were worse off.

“New Yorkers continue to climb a steep financial hill. Few say that their load has lightened since this time in 2008,” said Don Levy, the director of the Siena Research Institute, which conducted the poll that was underwritten by First Niagara Bank.

The poll comes a month before the presidential elections, as well as elections for Congress and the state Legislature. Enrolled Democrats outnumber Republicans in New York by a 2-to-1 margin.

Voters were split on their outlook of the national economy. Fifty percent, up from 45 percent a year ago, said they thought the nation’s current economic problems were temporary, the poll ssid. Half of those polled thought the country’s best days had passed.

Levy said the results showed more voters were looking, albeit slightly, to a brighter future.

“With half saying the economic glass is more full than empty as they look to the future, the trail may be evening out as we hit the next bend,” he said in a statement. “Younger New Yorkers, Democrats, and those with jobs are more optimistic than their older, Republican and not-working neighbors.”

The view of the economy was weakest in upstate and the New York City suburbs, the poll found.

By a 51 percent to 34 percent margin, upstate voters said they were worse off than four years. The sentiment was similar in the suburbs: 50 percent to 32 percent. In New York City, 42 percent of voters said they were worse off than they were four years ago, compared to 37 percent who said their situation had improved.

The economy, polls have shown, is the top issue in both New York and the nation.

New York’s unemployment rate in August was 9.1 percent — one percentage point above the national rate.

A report Tuesday by the Tax Foundation, a fiscally conservative group based in Washington D.C., said that New York’s tax climate was the worst in the nation.

Friday’s Siena poll found that the percentage of households with a member losing a job was unchanged from last year — 18 percent last year to 17 percent this month.

The “Annual New York Survey of the Economy and Personal Finances” by Siena College, which is located near Albany, had a margin of error of 3.9 percentage points. It was conducted Oct. 2-6.

Comments are closed.