New York Needs Something Different
By: Aaron Segal
Since 2010, New York has lost over one million people. It’s losing more every year. In 2015, it fell below Florida. Even adjusted for inflation, the NY State budget has increased by 20 billion dollars a year. Many of New York’s metro areas, such as Binghamton, Syracuse, Ithaca, and Utica, ranked within the lowest 20 out of 400 for economic growth since 2013. It ranks first for education spending, but 19th in education quality. It ranks first for healthcare spending, but 13th in healthcare quality. While spending huge amounts of money on infrastructure, it ranks 22nd. For opportunity, it ranks 44th. Economy: 29th. The pattern continues.
Another factor is alarming. With a decreasing taxpayer base, one would expect New York to reduce its budget, as not doing so would increase the burden on those who stayed. With less people, the costs of necessary services would supposedly decrease, not increase or even stay the same. Instead, the budget has increased, and the required taxpayer contributions have done so as well. Of course, New York, under Cuomo, can deny reality. It can say that the exodus is over, and that offering gigantic temporary stimulus packages to companies will fix everything. It won’t. Higher per capita taxes will drive people out at a faster rate. This is already happened, as 187,000 people left in 2015, while 223,000 left in 2016. This will not stop. The circumstances that drive people out of New York are exacerbated by a lower population and a desperate, out of control government. People will leave faster. Budgets will increase to keep them from leaving. Taxes will increase. People will leave faster yet. The cycle will repeat until something changes. This is reality. The solution is not artificial incentives to bribe corporations like Amazon into setting up their headquarters, the solution is to create a climate for business that is conducive to growth. If New York does not have this, no artificial incentive will change anything.
The artificial incentives are a central part of this horror show. In Cortland, a giant abandoned factory stands, barely being used, as it was built during a ten year tax break period. When you force a business to start paying higher taxes after giving it a break, it leaves. If New York offered lower taxes to compete with other states, businesses may grow and stay. Any decrease in New York’s government size would make a positive impact on the economy. But bribing businesses to stay long enough to create a few temporary jobs is not the solution. It’s like planting a flower in sandy soil. If you take perfect care of it, and give it all sorts of special treatment, it might grow, but if you want flowers to grow on their own, you need different soil. Business owners aren’t fools. They won’t fall for some sort of trick to get them to start a business and pay up ten years later. The only fool is New York, who is paying businesses to come, make a quick fortune, and leave when their time is up. This is not real economic policy. This is what a state would be like if governed by children.
This is not an opportunity to say “I told you so”, or to mock government for its failings. It is not an opportunity for people on one side to mock the other for their abstract errors in state government. This is New York. The state housing the biggest city in the country. New York City, the physical incarnation of capitalism at its finest. The physical incarnation of heroism and industry. And it is undone by politics. New York City was the place of opportunity that immigrants kissed the ground of upon arrival. Now it is a city of government overreach, a poison so great that it seeps into the rest of the state.
Politics aside, something is wrong. One doesn’t have to be a Tea Party radical to see that whatever New York has tried has failed. Nobody would disagree on the statement that it is a challenge to govern so much territory, along with the largest city in the country. But New York can be a state of prosperity again, and the solution is not legal bribery. The solution is not paying Amazon the best package to come here. The solution is fixing the problem at its source, creating a climate for business that is conducive to economic growth. Lower taxes. Privatization. Less subsidies. Less regulation. Any policy maker can cover their ears and drown out the reality that their state is failing. But what they cannot do is control this reality. No extra government program will keep people from leaving. We’ve tried big government, and it has failed. It’s time to give something else a try.