New York Is ‘Heading in the Wrong Direction,’ Leaders Say, as State Faces Worst Tax Burden in Country

A “very alarming trend” is how one New York lawmaker describes the state’s enormous tax burden and poor economic outlook. “It’s a sign that our state is heading in the wrong direction,” an assembly member representing New York’s 19th district, Ed Ra, tells the Sun. “We want to be attractive to businesses and to residents and right now, people in other states aren’t sitting there saying, ‘Hey, I’m making plans to come to New York,’ it’s New Yorkers that are making plans to say, ‘How many more years before I retire so I can go somewhere else?’”Mr. Ra will be at an April 15 Capitol press conference led by an assemblyman representing the 118th district, Robert Smullen, to explore “financial pressures” residents and businesses face amid troubling reports of the state’s economic future. The event, which will feature tax experts and Republican legislative leaders, aims to address the state’s tax rates and the “significant outmigration” as high costs force families to flee to lower-cost states. New York is “at a real disadvantage” as the legislature overspends “across the board,” Mr. Smullen tells the Sun. “We spend almost as much as California, which has twice as many people as New York — almost 20 million versus 40 million, or as much as Texas and Florida combined,” he says. The upcoming event will also explore the annual “Rich States, Poor States” report, which was released this week by the American Legislative Exchange Council and ranked New York as the worst state in the country for economic outlook — a designation it has had every year since 2014. A state’s economic outlook is a “forward-looking forecast,” the report says, based on 15 policy factors, including personal and corporate income tax rates, minimum wage, and other tax burdens. Meanwhile, New York ranks 29th in economic performance, a “backward-looking measure” that evaluates the state’s GDP growth, domestic migration, and non-farm employment growth. When it comes to taxes, a WalletHub report surveying data from all 50 states found that New York had the highest total tax burden, with “residents paying out around 12 percent of their income to state and local governments.”“What’s really important for many in upstate New York, where the level of outmigration is second only to Oklahoma during the Dust Bowl in the Depression era, is that taxes are so high that people that can are making the decision to move to other states where they have much lower taxes and their cost of living is thus that much less,” Mr. Smullen says. It’s evident, he adds, that the state’s attorney general, Letitia James, has fostered a hostile environment. “When you have an anti-business outlook from the attorney general, businesses look out for it, and they are willing to go to other states where they’re welcome,” Mr. Smullen says. As residents face a looming deadline to pay taxes, the legislature has been unable to pass the state budget despite its April 1 deadline. “Our hope is that next week is the week. You know, we have Passover coming and we really need to get it done before then,” Mr. Ra, who is the ranking minority member of the Assembly Ways and Means Committee, says of passing the budget. “It’s unfortunate to see a single-party government unable to, for the second year in a row, get their act together on a budget and we’re going back in session tomorrow to pass our fourth extender, and it just doesn’t seem like they care very much about the fact that we’re past the deadline.”As the budget is being worked out, a major issue for the state — as the Sun noted in a recent editorial — is overspending.“Our state spending jumped tens of billions of dollars over the last few years,” Mr. Ra says, as an influx of federal pandemic funds drove spending up to unsustainable levels. A huge chunk of the budget is Medicaid-related, he notes, but lawmakers are spending billions of dollars on failing economic development programs and on migrants.“We’re spending $4.3 billion on migrants over three years instead of doing things to get that situation under control, like rescinding our status as a sanctuary state,” Mr. Ra says. “There’s a lot of things that I think we need to do, and it starts with controlling our spending.”

New York Is ‘Heading in the Wrong Direction,’ Leaders Say, as State Faces Worst Tax Burden in Country

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