This week the New York State Budget for FY 2021-2022 passed both houses of the State Legislature. The budget, at $212 billion, is the largest in New York State’s history and is nearly a 10% increase over last year’s record-high budget. It contains $4 billion in new taxes granting New York State the distinction of soon having the largest personal income tax rates in the country.
In most instances, being Number One is a good thing. Unfortunately, being Number One in terms of having the highest state taxes in the nation is a major exception. And as expected, that’s where New York finds itself following the passage of the new State Budget. As they lyrics of the anthem “New York, New York” boast: “We’re A #1, King of the Heap.” And that can only spell trouble for the state in terms of attracting and retaining businesses.
The BCW has repeatedly warned of the dire consequences of over taxation and spending beyond our means. In January, the BCW started sounding the alarm to the Governor and the Legislature that we did not support the proposed tax increases that were being proposed as raising taxes should not and cannot be a long-term solution. In order to remain competitive, New York State must bring back and create new jobs as a means of bringing in more revenue, and not resort to tax increases. Raising taxes simply sends the wrong message to businesses and residents in New York and to those contemplating a move to New York and will certainly further impair the State’s economic climate.
The BCW has stayed consistent with this message and once we saw the dollars that New York State was going to receive from Washington, DC, we again reiterated that the tax increases proposed by the Senate and the Assembly were not necessary and would have a major negative impact on future economic development in the State.
New York has been and remains a unique and great state. As we pull out of the Pandemic, we can only continue to urge our state leaders to remember that it’s the businesses and the taxpayers who provide the funds that state spends. And there is a breaking point that imposing the nation’s highest taxes will put to the test.
While for some of our legislators this may be an inconvenient truth — businesses and residents can and do relocate to lower cost, business friendly states. Moving forward, the issue of high tax and spend policies must become a far greater part of the dialogue and debate in Albany. We fail to do so at our own and our state’s economic peril.