We have the worst business tax climate in the nation, period. Our taxes are 66% higher than the national average. Upstate is truly an economic crisis. In real GDP, from 2001-2006, upstate New York grew about 1.7% per year while the average in the nation was 2.7%. The costs of pensions are exploding, 1.3 billion in 1998-1999, projected for 2013, 6.2 billion - a 476% increase and its only getting worse.
The State of New York spends too much money, it is that blunt and it is that simple. Our spending has far exceeded the rate of inflation. From 1994-2009, inflation was about 2.7% per year; medicaid when up over 5% per year and education went up over 6% per year. We just can’t afford those rates of increase. State spending actually outpaced income growth. State spending increased just under 6%, personal income growth was only 3.8%.
And most damaging, our expenses in this state far exceed revenue. We’ve been focusing on this year and the deficit this year, which is a very large deficit about $10 billion, and that is a problem and it is a major problem; what’s worse, is it’s not just about this year. Next year, the problem goes to $14 billion. The year after, the deficit goes to $17 billion. This is not a one year problem my friends. This is a fundamental economic realignment for the State of New York.
Not only to we spend too much, but we get too little in return. We spend more money on education than any state in the nation and we are number 34 in terms of results. We spend more money on Medicaid than any other state in the nation and we are number 21 in results. We spend about $1.6 billion per year in economic development and we are number 50 in terms of results.
And it’s not just State government – the proliferation of local government and special districts all across the State now over 10,500 driving that property tax rate up all across the State. And the large government we have is all too often responsive to the special interests, over the people of the State of New York. The proof is in the pudding. And New Yorkers are voting with their feet. Two million New Yorkers have left the State over the past decade.
We currently have a government of dysfunction, gridlock and corruption. We are going to redesign our approach because the old way wasn’t working anyway, let's be honest.
We are going to start by transforming New York’s economy. Because what made New York the Empire State was a not a large government complex, it was a vibrant private sector that was creating great jobs in the State of New York. We get it. And this is going to be a business friendly State.
Competition works.
Next, we are going to have to confront the tax situation in our State. The property taxes in New York are killing New Yorkers. Thirteen of the sixteen highest tax counties are in New York when assessed by home value. In absolute dollars, Westchester County the highest property taxes in the United States of America. Nassau County the second highest property taxes in the United State of America. It has to end, it has to end this year.
We have to hold the line on taxes for now and reduce taxes in the future. New York has no future as the tax capital of the nation. Our young people will not stay. Our business will not come. This has to change.
Put it simply the people of this state simply cannot afford to pay any more taxes, period.
In 1938 a reform was passed, a constitutional amendment, that said there could be only 20 executive departments – 20 - so what has happened since then. Well we couldn’t create any more departments but the law didn’t say anything about creating councils, advisory panels, working groups, facilities, offices, task forces, institutes, boards and committees.
The Department of Health is only one department in compliance with the law, however there are 87 other organizations that have been added to the Department of Health, 46 councils, 6 committees, 17 boards, 6 institutes, 2 task forces, 5 facilities; it’s time to organize the government make it professional. We need to transform our budget. We have to start with an emergency financial plan to stabilize our finances we need to hold the line and we need to institute a wage freeze in the State of New York. We need to hold the line on taxes, we need a state spending cap and we need to close this $10 billion gap without any borrowing.