‘Building on Success” was the theme of Gov. Cuomo’s election-year budget presentation in Albany this week. But while Cuomo boasts he’s got New York headed in the right direction, the latest economic and demographic indicators suggest we still have a long way to go.
According to Census Bureau estimates released yesterday, the Empire State lost a net 104,470 residents to the rest of the country during the 12 months ending last July 1. That brings New York’s net “domestic migration” loss since 2010 to 328,538 people — the largest outflow of residents any state saw in that period.
The migration numbers are a big reason why New York is about to drop from third to fourth place in the nation’s state population rankings — behind Florida, where large numbers of New Yorkers have headed for decades.
On the heels of the Census numbers came the state Labor Department’s monthly employment report, which also showed room for improvement. During the 12 months ending in December, New York’s private-employment base grew 1.5 percent, markedly slower than the nation’s 2 percent rate.
Measuring from the pre-recession peak at the end of 2007, compared to the national average, New York lost many fewer jobs during the recession and recovered more quickly to peak employment status. But the Empire State’s overall job-growth pace since Cuomo took office has fallen below average.
There’s a striking regional differential in the numbers. Boosted by jobs in tourism, entertainment and health care, New York City remains a bright spot. Even its high unemployment rate can be read as a positive, since it stems from more people entering the workforce. But north of the city, the picture gets gloomier.
To be sure, these trends are the products of multiple forces and can’t be laid entirely on the doorstep of a governor who hasn’t finished his first term — no matter how much he may like to exaggerate his impact.
But Cuomo certainly hasn’t helped matters by, among other things, raising the minimum wage, failing to embrace significant regulatory reforms and continuing to stall on issuing rules to allow natural-gas hydro-fracking in the Marcellus shale region, which would create thousands of desperately needed jobs and growth for upstate’s utterly stagnant Southern Tier.
So what will his proposed budget do to improve the situation?
The governor’s chief answer is “tax relief” — a phrase that needs to be kept carefully in quotes when used in connection with Albany.
Cuomo’s budget includes a pair of solidly pro-growth tax-policy changes, reforming and reducing both the state corporate tax and the estate tax. He also would eliminate what’s left of corporate income tax on manufacturers — as long as they’re based solely in upstate New York, that is.
Well over half of the money in his tax package is devoted to property-tax breaks for homeowners and renters, including a convoluted and temporary property-tax “freeze,” available only to those living in jurisdictions that keep under the state property-tax cap. He’s also proposing a permanent new “circuit breaker” tax credit — in reality, not so much a cut as a shift in taxes, from the local to state level.
To his credit, Cuomo is continuing to keep a tight lid on overall state spending, which he’s holding to the inflation rate. But the governor’s “tax relief” agenda is ultimately financed by billions of dollars in supposedly temporary tax and fee increases he has extended since taking office. The biggest of these tax hikes, generating $2.6 billion a year, falls on individuals who earn at least $1 million in New York, or couples who make at least $2 million here.
The irony, of course, is that the state budget is being portrayed on terms of Cuomo’s resistance to Mayor de Blasio’s proposal to raise the income tax in New York City. Yet their differences stem less from ideology than from Cuomo’s well-founded practical concern that de Blasio’s tax hike could be the final straw for many of the same high-income professionals, business owners and investors already footing the bill for much of the governor’s state agenda.
Until New Yorkers stop heading for the exits, it’s a bit early to declare “success.”
E.J. McMahon is president of the Empire Center for Public Policy