NCPA - National Center for Policy Analysis


January 23, 2006

In his final state of the state address this month, Gov. George Pataki painted a rosy economic picture of New York, insisting that the Empire State "is strong and getting stronger everyday" and "a more prosperous state than it's been in generations." But a new Manhattan Institute report begs to differ.

According to researchers:

  • Between 1979 and 2004, New York created new jobs at less than half the national pace.
  • New York's share of total U.S. personal income dropped by nearly 10 percent during the same period.
  • Its share of all states' economic output dropped by 12 percent.

The researchers say the state's "astonishingly high tax burden" is largely to blame for this steady decline. The average New Yorker's overall tax burden has ranked first or second in the nation every year since 1970, according to the Washington D.C.-based Tax Foundation.

Consequently, New Yorkers have responded by seeking economic opportunity elsewhere:

  • The Census Bureau reports that between 1995 and 2004 nearly 1.7 million residents quit the state
  • New York has had an outmigration rate well above average in the Northeast and tops in the nation from 2000 to 2004
  • Since 1980 the state has lost 10 Congressional seats.

In response, Gov. Pataki says he's open to several ideas and wants to use his final year in office to steer the state back toward pro-growth tax policies. He is expected to propose recommendations from his tax-reform commission, though he indicated he wants to phase suggestions in over several years, which means they will be heavily backloaded into a successor's tenure, says the Wall Street Journal.

Source: Editorial, "Empire Falls," Wall Street Journal, January 17, 2006; and "Albany, Inc.: The Special Interest Conglomerate That Runs New York," Manhattan Institute, January 11, 2006.

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