BUFFALO, N.Y. - This isn't a newsflash: New York again found itself at the bottom of a national ranking about tax burden.
The latest rating, published Tuesday morning in USA Today by the financial news outlet 24-7 Wall Street, placed New York dead last among all 50 states. Using data from the reputable Tax Foundation, the article noted that New York residents cough up 12.7 percent of their incomes to state and local taxes.
Conservatives have long criticized New York as a glaring example of big government, but even Democrats have bemoaned the tax climate. Gov. Cuomo, who campaigned on taming the tax burden, has advocated for a number of measures during his first two terms in office. Since 2010, the corporate tax rate has fallen from 7.1 percent to 6.5 percent, income tax rates have fallen slightly across all tax brackets and property taxes have been curbed ever since a cap went into effect in 2011.
Still, New York ranks in the bottom 10 nationally in sales tax, income tax rate and property taxes, according to the Tax Foundation.
Buffalo Niagara Partnership, which serves as the regional chamber of commerce to help local businesses thrive and expand, has complained for years that New York's tax climate deters growth.
"No doubt, the region has made strides: We're in a much, much stronger place than 15, 10, even five years ago, and New York state deserves a lot of credit for that," Vice President for Government Affairs Grant Loomis said. "But at the same time, we're comparing ourselves against ourselves. When you compare us to other regions, that's where we're not seeing the forward motion."
Even though New York launched an aggressive (and costly) advertising campaign to promote its business-friendly climate, lawmakers continue to demand more action from the Cuomo administration. The most vocal legislators are often conservative-leaning Republicans, but even Democratic Assemblyman Robin Schimminger (D-Kenmore) has actively criticized the state's tax climate from within the party.
"It is certainly a common complaint," Schimminger said, "The job creation climate is a function of the burden of regulation, burden of costs such as unemployment, workers' compensation and, of course, taxes. Progress needs to be made."
Job growth in upstate New York has lagged behind New York City since the recession, but Gov. Cuomo and some of his Democratic allies have touted Western New York as a national recovery model. They cite an explosion of development in Buffalo, be it Canalside, the medical campus or any of the other well-known projects around town.
And certainly, Cuomo could argue that taxpayers in New York get a return on their investment in the form of, say, the country's largest higher education system, or these economic development projects funded through public Buffalo Billion dollars.
"State spending goes largely for good purposes: A state university system, some modest assistance to the independent colleges, a social service network, cultural institutions. These are all aspects of living in New York state," Schimminger said. "But at the end of the day, that bean-counter in the company that's deciding whether to expand into New York or move into New York, he or she looks at the bottom line."
This debate over state and local taxes has, of course, been part of the larger discussion at the federal level. Under the new GOP tax code, New Yorkers will be limited to $10,000 in deductions of their state and local taxes on federal returns. Cuomo and many Democrats said the GOP plan will unfairly devastate high-tax states like New York; Republicans have said that's an overreaction and that the state should lower its taxes if it really feels that way.
As a way to get around the SALT deduction limit, though, Gov. Cuomo has proposed a payroll tax in New York that would shift burdens onto employers and away from employees' incomes.
But Loomis said it's a structural issue when it comes to state and local taxes.
"At the end of the day, until the state addresses all the fundamental reasons why New York has earned a reputation as being a very difficult place to own and operate a business, we're not going to improve in our rankings," Loomis said. "We're not going to become a place that's competitive with other regions around the country."