It’s not much to brag about, but New York retains its first place nationwide as the state with the highest taxes, according to a review in The Wall Street Journal of collection data published by the Tax Foundation, an organization in Washington, D.C. “On the high end, New York ranked as the least tax-friendly state—residents pay an average of 12.9% of income in all state and local taxes,” the Journal reported on April 9.
Like so many New Yorkers, my husband and I had the dismaying experience this April 15 of writing a supplementary check to the New York State Income Tax. This was because New York socks taxpayers for long-term capital gains, even for the property held for decades. In January, we were hit with a big real estate increase, because of the State-mandated cost to Warren County of approximately fifty percent of the State’s bill for the federal Medicaid program. Most other states do not pass down the state share of Medicaid to localities and property owners.
It is no secret that high taxes, countless fees, and hostile regulations have been driving businesses and residents out of New York State for years. The Journal article, by Nancy Keates, discussed the decisions that retirees are making about where to live, which can be influenced by the tax burden.
“Of course, most people don’t base where they live on taxes alone…,” the article pointed out. “But every year approximately one in seven Americans changes residences, according to the U.S. Census Bureau, and tax advisers and real-estate agents agree that taxes are becoming more of a consideration.”
Pointing to New Mexico, the Journal observed that reductions in personal income tax have been a factor in keeping New Mexico’s rating below the top twenty lately. According to the article, Nick French, who manages Sotheby’s International Realty in Santa Fe, said, “‘I think it’s making a big difference’ in attracting buyers.”
New York State maintains its population through immigration from abroad, as a constant stream of residents moves out. Complaints abound over the high proportion of foreign-born residents in California, but New York State, long a gateway to this country, is second highest, with 20.9%. While immigrants are more concentrated in the New York City area, parts of upstate New York are in deep decline. This is a big change from the days when New York was growing to become the Empire State. Then, the entire state was burgeoning with commerce, industry, and farming. According to Fred Dicker’s column in the New York Post on February 12, a study called the “Long Island Index 2004” about the area’s population trends “found that the 18- to 34-year-old population dropped a whopping 20 percent through the decade ending 2000 — five times the rate of national population decline.” Dicker reported that 18,000 people in this age group left Long Island in 2001 alone.
Deals like the extraordinary one Gov. Pataki announced this spring for the State to acquire conservation easements on more than 255,000 acres of International Paper Company land in the Adirondacks are partly driven by the high taxes on forest property. In addition to shelling out up to $25 million for the nearly 260,000 acres in the entire deal, the State will take over payment of about 85 to 90 % of the real estate taxes.
This expensive deal for New York’s taxpayers is typical of expenditures to please interest groups, in this case, not just industry, but also the high-profile environmental organizations, which work ceaselessly to shift the title to private land to the State and to increase State control over private land.
This year, upstate legislators are focusing on reform of the method of paying for the cost of Medicaid. The situation has become desperate. Medicaid reform is at the top of her list, said Senator Elizabeth “Betty” Little (R – Glens Falls), at a meeting of the Hamilton County Board of Supervisors, according to an article in January in the Hamilton County News. Medicaid is “the mother of all mandates,” said Mike Miller, who represented Assemblyman James Tedisco (R, C – Schenectady) at a meeting of county legislatures in Saratoga Springs during March. According to the report about the March meeting in the Hamilton County News, Assemblywoman Teresa Sayward (R – Willsboro) said, “We shouldn’t settle for anything less than a complete takeover of Medicaid by the state.” A constitutional amendment proposed by the Senate (S. 675) would prohibit unfunded mandates.
The time has long been overdue for this State to stop taxing its citizens at this confiscatory level. The State should cut the benefits to interest groups, the corruption, the waste, and the regulation. The State should take Medicaid out of the real estate tax levy by paying the full federal bill from the State treasury. The State government should stop driving businesses and residents out of New York.
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