For Release — Thursday, March 9, 2006
NEW 'JUST THE FACTS' SHOWS NEW YORK LEADS MOST STATES IN BUSINESS COSTS
ALBANYBusinesses in New York labor under heavier cost burdens than those in most competing states, from business taxes and workers' compensation to wages and energy costs, a new "Just The Facts" compilation by the Public Policy Institute of New York State shows.
The Institute, the research affiliate of The Business Council of New York State, published the latest on-line installment of Just The Facts: Key Economic and Social Indicators for New York State, available at www.ppinys.org/reports/JustTheFacts.html. The report includes 39 tables comparing the cost of major business expenses, along with other indicators, in New York and the other states.
As Governor Pataki and the Legislature consider several major proposals to reduce business taxes, Just The Facts shows that New York's business-tax burden is rated the worst in the country by the independent, Washington-based Tax Foundation. By another measure, total business taxes as a proportion of private-sector economic activity, New York's business taxes are 10th-highest in the country and 21 percent above the national average.
The overall cost of doing business in New York is second-highest in the nation, after Hawaii's, according to a national study cited in Just The Facts. That measure, by the nonprofit Milken Institute, includes costs for wages, taxes, electricity and industrial and office rents.
The average cost of a workers' compensation case in New York, $16,114, is second-highest in the country and almost double the national median. Other employee benefits, such as health insurance and unemployment insurance, also cost more in New York than in most other states. The Empire State's minimum wage is sixth-highest in the country, 31 percent above the level in most states, and scheduled to increase further in January 2007.
Manufacturers and other companies that consider potential locations across the country for new investment and jobs often express concern about New York's reputation for pro-union policies. Just The Facts shows that the proportion of workers represented by unions is higher in New York, at 27.5 percent, than in any other state.
Average electric prices in New York are 63 percent above the national average, according to the Institute. Natural gas costs are also higher than in most other locations, particularly for industrial customers. Auto-insurance rates in the Empire State are second-highest in the country, while the liability portion of such coverage is the highest. Just The Facts also shows that civil juries in New York are considered less predictable than those in most states, although the state's overall legal system ranks in the middle of those nationwide for fairness.
Other nationally recognized rankings of states' business climates and economic performance, cited in Just The Facts, rate New York relatively poorly.
The Beacon Hill Institute's State Competitiveness Index, which assesses numerous factors including technology, government fiscal policy and labor force, ranks New York 40th among the states. The Pacific Research Institute's Economic Freedom Index, which considers fiscal burdens, regulatory practices and other factors, rates New York's economy the least free in the United States.