Remember how former New York City Mayor Ed Koch used to ask, “How’m I doing?” Well, after the debacle of the recent State budget, I (Matt Crosson, LIA president) have been wondering how New York is doing. I came across a report entitled “Rich States, Poor States” published by the American Legislative Exchange Council (ALEC), which is described as a non-partisan organization of state legislators around the country who are fiscally conservative. The report presents what is called the “ALEC-Laffer Economic Competitiveness Index,” a ranking of the 50 states according to their economic performance and economic outlook.

New York’s 2009 economic outlook was dead last, no pun intended. And that was before the budget and its huge tax increase was done.

The idea behind the Index is that the heavier a state’s taxation, the lower its economic outlook. No surprise, therefore, that New York was at the bottom of the list. It’s pretty certain, based upon their decision to raise taxes an effective $9 billion in the midst of a recession, that the triumvirate ruling Albany at the moment would not admit that the State’s economic outlook is bad because of high taxes.

You’ve heard their argument: “there is no evidence that people have left New York because of high taxes.” Apparently they are of the opinion that there is no evidence that high taxes and low economic performance or prospects are related either. Really? Just noodling around I put together the following facts about New York’s taxation levels and economy. There will be more to come as we develop the list further. But I think most people would look at these figures and conclude that, in fact, there is very compelling evidence of the connection between New York’s nation-leading taxes and our dismal economic condition.

In looking at these figures, keep one important thing in mind: the tax increases just enacted, effectively almost $9 billion worth, are NOT included here.


New York Tax and Economic Facts

Poorest Economic Outlook 2009 (rank 50 of 50)

Source: ALEC-Laffer state economic competitiveness index

#1 Population Loss, last 10 Years

1.9 million net loss
Source: U.S. Census Bureau

#1 State and local tax burden

$6,405 per capita; $151/per $1,000 income
FY2005-2006 Source: public policy institute analysis of census data

#1 Local taxes per capita

$3,432 per capita
FY2005-2006 Source: public policy institute analysis of census data

#1 Individual income tax per capita (Before 2009 tax increase)

$2,000
FY2005-2006 Source: public policy institute analysis of census data

#1 marginal personal income tax rate rank

FY2005-2006 Source: public policy institute analysis of census data

#1 marginal corporate tax rate rank

2009; Source: ALEC-Laffer state economic competitiveness index

#2 Corporate income tax per capita

$469 (Alaska #1 at $1,226)
FY2005-2006 Source: public policy institute analysis of census data

#3 State & local government debt per capita

$12,504 (Alaska, Mass #s 1 & 2)
FY2005-2006 Source: public policy institute analysis of census data

#5 State & local property tax per capita (Before 2009)

$1,887 (NJ, Conn, NH, Wyo. Are #s 1,2,3,4)
FY2005-2006 Source: public policy institute analysis of census data

#6 Property tax burden per $1,000 personal income

2009; Source: ALEC-Laffer state economic competitiveness index

#8 Average family health premium 2006

Source: Kaiser Foundation State Health Facts

#34 (50 is Worst) Private sector employment growth

1997-2007; 3 yr rank: 33 of 50
Bureau of Labor Statistics data

#43 (50 is Worst) Economic performance 2009

2009; Source: ALEC-Laffer state economic competitiveness index


#48 (50 is Worst) Manufacturing employment 1997-2007

3 yr rank 46/50
Bureau of Labor Statistics data

#50 (Highest) Estate/inheritance tax 2009

2009; Source: ALEC-Laffer state economic competitiveness index