For Release — November 18, 2003
INSTITUTE: NEW YORK'S TAX BURDEN IS THE NATION'S HEAVIEST;
THIS ECONOMIC DISADVANTAGE HURTS EMPLOYERS AND WORKING FAMILIES
The report inaugurates Tax Watch '04, a new Institute series on taxes and spending
ALBANYNew York State's taxes are the nation's highest, and this economic disadvantage drives jobs to other states and hurts New York's employers and working families, according to the first in a new series of papers to be published by The Public Policy Institute of New York State.
Only elected officials' commitment to restrain government spending can reduce this burden on New Yorkers, the report added.
The report is called Taxes are Far Out of Line in New York. Will Albany Make Them Worse? It is the first in a new series of Institute briefing papers called Tax Watch '04. The Tax Watch '04 series will document the stultifying effect of taxes on New York's economy, and the importance of restraining government spending as an essential first step in reducing New Yorkers tax burden. The Institute plans to publish several more in the series in the weeks ahead.
"Combined state and local taxes in the Empire State are the highest in the nation, after adjusting for personal income," the paper said. "They're far higher than those in the locations that compete most directly with us for business and jobs."
As of 2000, New York's tax burden averaged $4,578 for every resident. That figure is 48 percent above the average for all states.
"High taxes make it harder for employers to succeed here, driving jobs to more competitive locations in other states," the paper said. "They hurt working families by taking opportunities away from today's breadwinners, and forcing our young people to go elsewhere in search of a brighter future."
The paper added that taxes "are among the primary reasons that upstate New York, in particular, struggles to stanch the hemorrhage of both its population and its vitality."
The Institute noted that New York's taxes are the nation's highest, or nearly highest, in virtually all categories of taxation: personal income tax, business taxes, property taxes, sales taxes, utility taxes, and estate taxes.
Not long ago, elected officials in both major parties recognized the importance of reducing New Yorkers' tax burden, the report noted, citing an eight-year period beginning in the mid-1990s when state lawmakers reduced many different taxes.
"Our business climate improved dramatically, and employers created jobs by the thousands," the report said.
But momentum was lost in 2003, when lawmakers increased taxes by $2 billion to support higher spending on Medicaid and education. To keep up with these spending increases, localities also raised their taxes, the report noted. Only three other states joined New York in raising taxes more than 5 percent this year, the National Conference of State Legislatures has noted.
New York's lawmakers embraced higher taxes despite strong and persistent evidence that New Yorkers continue to prefer reduced government spending to higher taxes.
A recent Quinnipiac University opinion poll found that most New Yorkers prefer cuts in government programs, rather than tax hikes, to close budget gaps. Upstate residents, in particular, supported lower government spending. These poll results are virtually identical to a similar Quinnipiac University poll from December 2002.
A Marist College poll earlier in the year found similar results, with respondents choosing cutting state jobs or cutting services rather than raising taxes, the report said. Even when given a choice of "tax increases with spending cuts," or "spending cuts only," voters tend to choose the latter, a Syracuse Post-Standard survey found.