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Cuomo’s Doing Nothing about the Burdens That Drive People to Flee New York

August 31, 2018 in Economics

By William Ruger, Jason Sorens

William Ruger and Jason Sorens

Making a case for a third term, Gov. Cuomo argued Wednesday that
New York “has
always been the progressive capital
” of the nation and the
alternative to President Trump’s conservative policies. Indeed,
Cuomo himself has worked from the progressive rulebook, as when he
pushed for a $15 minimum wage, paid family leave or more
restrictions on gun rights.

And he has been largely successful in making New York more
progressive. Unfortunately, that may be precisely why so many New
Yorkers are leaving. From January 2000 to July 2016, the latest
available data, New York lost a net 14.1 percent of its population
to other states — the biggest loss in the country.

To hear Cuomo tell it, the biggest problem with New York is
wasteful local government, and his solution is centralizing power
in Albany and dishing out more corporate welfare. There may be a
kernel of truth in that, but it misses the bigger picture.

New York has the highest local-tax burden in the country, an
incredible 8.5 percent of income on average. If you live in Erie
County, you can easily pay 4 percent of your home value in annual
property taxes, plus an 8.75 percent sales tax, plus New York’s
progressive income tax (over 6 percent for most families), plus
high gas taxes and tolls on I-90 and an assortment of minor taxes
and fees.

To make New York a great
place to live, not leave, Cuomo ought to focus on cutting tax
rates, easing regulations and allowing more freedom.

No wonder so many New Yorkers have fled. One of us moved to New
Hampshire after living in Buffalo for eight years. In New
Hampshire, you might pay a similar property-tax rate in some areas,
but you have no broad-based income tax or general sales tax.

There, counties subsist on a sliver of property-tax revenue,
while state government gets the bulk of its revenue from business
taxes and rooms and meals taxes. Meanwhile, schools and roads seem
every bit as good in New Hampshire as New York, and the poverty
rate is lower.

Why are local governments so expensive to run in New York? It’s
actually not their fault, for the most part.

State government hobbles localities with costly, pro-union
policies like the prevailing-wage law, which requires governments
to pay a significantly above-market wage for construction projects,
and the Taylor Law, which sharply restricts municipalities’ ability
to limit collectively bargained benefits for their workers.

Municipalities also can’t control pension liabilities by
requiring defined-contribution rather than defined-benefit
plans.

The solution to the astronomical local-tax burden is to give
municipalities more control over their own spending, …read more

Source: OP-EDS

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