New York State is in its death throes. Its economy is collapsing, real estate values are crumbling, jobs are disappearing and the middle class is fleeing. But the state’s political class is frightfully out of touch.
A report released by the Mercatus Center at George Mason University, Freedom in the 50 States: An Index of Personal and Economic Freedom, determined that from a fiscal, economic and regulatory perspective New York is the least free state in the nation.
The study confirms that New York has the highest local taxes and the highest combined state and local taxes. The state business tax climate and the cost of doing business is the worst in the union. The report concludes that most New Yorkers will not be surprised by the findings and that “Sadly, equally few New Yorkers seem to believe that anything can be done about this situation.”
This environment has forced dispirited citizens to vote with their feet: since 2000 over 1.5 million residents have left New York to seek opportunities elsewhere. Reacting to this phenomenon, the Manhattan Institute’s Steve Malanga stated: “Our economic rate of growth is even less now than it was in the ’90s, and that may suggest that out-migration is likely to intensify. People can see very clearly how their lives are affected by slow economic growth or higher taxes.”
And during the worse economic downturn since the Great Depression, what is our state government’s response to this desperate situation? Significantly increased spending and much higher taxes.
Albany’s latest act of lunacy is the imposition of a payroll tax on the private sector, local governments, school districts and non-profits in 12 downstate counties to finance the ailing Metropolitan Transportation Authority. Only school districts will be held harmless from the tax although that “guarantee” is subject to annual legislative action.
This payroll tax, which is 34 cents per $100 of salary, could break Long Island. Our two county governments, which are frantically searching for ways to deal with budget revenue shortfalls, must now pony up another $6 million. The tab for Long Island school districts is estimated at $24 million. Many local municipalities will have no choice but to stick their long suffering home owners with property tax increases.
Surprisingly, two members of Long Island’s senate delegation, Brian Foley and Craig Johnson, voted for the MTA payroll tax. My initial reaction to this news was that Senate Majority Leader Malcolm Smith promised them plenty of political swag for casting their irresponsible Yea vote. But after reading Senator Foley’s comments defending his decision, I concluded he might just be extraordinarily ignorant of economic realities.
Some Long Island pols get it. For instance, Nassau Comptroller Howard Weitzman, who warned that the cost of the tax on the private and not-for-profit sector should be of concern to all but Foley actually told WLNY-TV that the MTA tax will not affect any business, and that “you have to wonder about the fragility” of any business that says it is affected by it.
What an offensive and dim-witted statement. Senator Foley insults every hardworking entrepreneur and non-profit leader who is struggling to survive and pays his salary and per diems.
In this grueling recessionary environment, every Long Island business is fragile. And at this critical time to dump on them a payroll tax will force many to lay off employees or shut their doors.
Our hospitals are also at risk. Long Island’s largest employer, North Shore Hospital (35,000 workers) is, in a good year, only marginally cash positive; .50 to 1.50 percent. Its share of the MTA payroll tax, estimated to be $8 million, would eat up about 15 percent of the amount of cash North Shore generated in 2007 on revenues of about $4 billion.
As for Long Island’s non-for-profits, with contributions down and demand for services up, this tax could cause scores to close.
Senator Foley and his Albany colleagues are inflicting incredible financial pain on Long Island’s businesses, municipalities and their over-taxed citizens. They just don’t get it – runaway taxes contribute to economic decline. And in a recession, tax hikes compound the damage.
It is becoming more evident everyday that the only way to curtail Albany’s runaway spending, excessive taxes and fees, and fiscal experiments, is for voters to rise up and cast a vote of protest at the ballot box. It is time for Albany legislators, like Senator Foley who have betrayed the taxpayers and the fragile businesses he regards with scorn, to be swept into the dustbin of history.
http://libn.com/thedebateroom/2009/05/11/marlin-with-foley-in-office-every-li-business-is-fragile/
