Empire Center for
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May 17, 2013
Financial disclosure filings made public yesterday have revealed that Governor Andrew Cuomo has a net worth of at least $1.75 million. But in one sense, that doesn’t actually make him unusual among New York government employees at his level of education and experience.
Imagine an alternative career history for the governor, in which Cuomo decided not to pursue a career in law and politics. Instead, after graduating from Fordham in 1979, he went straight to work as a public school teacher in, let’s say, the city of Yonkers. Today, after 34 years in the classroom, he’d be a Tier 3 retirement system member making a salary of $118,709.* And, having turned 55, he’d be eligible to immediately retire with a pension of $78,384, which has a net present value equivalent of nearly $1.6 million — i.e., it would cost a man Cuomo’s age $1.6 million to purchase an annuity worth $78,384 a year for the rest of his life.**
May 16, 2013
The latest economic data for New York continues to relate a tale of two states. Private sector employment growth in New York as a whole slightly trailed the national average on a year-to-year basis, but was much stronger in the New York City metropolitan area. The 52-county upstate region grew at just half the national rate from April 2012 to April 2013, according to today’s monthly jobs release from the state Labor Department.
12-month job change. Darker shading=less growth
The state added 137,000 jobs, a gain of 1.9 percent during a period when the nation was growing 2 percent. Fifty-seven percent of the net new private jobs were created in New York City, which grew at a rate of 2.5 percent. The strongest job growth (2.9 percent) was in Nassau-Suffolk–which may, in part, reflect ongoing reconstruction and recovery from Superstorm Sandy. The fastest-growing private-sector job category (up 43,100) was educational and health services, which also heavily dependent on federal, state and local government subsidies. The next fastest-growing, business and professional services, has been strongest in New York City in recent years.
May 14, 2013
CEOs apparently aren't buying it.
Maybe the nation’s CEOs don’t watch enough TV, or perhaps they lack a sufficient appreciation for Jay-Z and Alicia Keys.
Whatever the reason, respondents to Chief Executive magazine’s ninth annual survey of ”Best and Worst States for Business“ ranked New York among the worst at 49th, unchanged from last year. Other bottom-dwellers included California (#50), Illinois, Massachusetts, New Jersey and Connecticut. The top-rated states: Texas, Florida, North Carolina and Tennessee.
May 13, 2013
The state pension fund gained about 10.4 percent on its investments during the recently ended 2012-13 fiscal year, Comptroller Thomas DiNapoli announced today. The latest gain is comfortably above the pension fund’s 7.5 percent target rate of return.
So happy days are here again in public pension land, right? Um, no—not quite. A couple of points: (more…)
April 30, 2013
Opponents of Governor Cuomo’s 2 percent property tax cap were able to stick one major exclusion into the legislation before it passed in 2011: a provision excluding a portion of local government and school employee pensions from the total allowable “levy limit” in years when taxpayer-funded employer contributions rise by more than two percentage points of salaries.
That loophole will push the average “levy limit” in this year’s upcoming school votes to 4.6 percent statewide, more than double the base cap and the inflation rate, according to a report issued by the Empire Center today. And, ironically, the pension exclusion will make it easiest for the poorest districts to avoid a “supermajority” requirement for passing their budgets.
If not for the pension exclusion, the levy school tax limit statewide this year would average 2.7 percent, including allowances for factors such as physical additions to the tax base (new construction, not assessment manipulations) and partial “carry-forwards” of unused cap space from last year.
April 24, 2013
New York’s rate of growth in withholding tax receipts during the final quarter of 2012 was among the lowest for any state with an income tax, according to the latest quarterly State Revenue Report from the Rockefeller Institute of Government. ***See Update at bottom of post.***
Withholding taxes are driven mainly by changes in employment and wages and thus serve as an indicator of economic growth. The Rockefeller Institute’s report says New York’s withholding receipts grew by 3.3 percent in the fourth quarter of 2013. That was less than half the national average of 7.8 percent, and also below the five-state Mid-Atlantic regional average of 4 percent. Only six of the 41 states with income taxes had lower withholding growth during the same period. (According to the same Rockefeller Institute report, New York’s employment growth in 2012 was also below average.)
One important caveat: on a year-over-year basis, New York’s personal income tax receipts in 2012 were reduced in part due to the Dec. 31, 2011, sunset of a portion of the “millionaires tax” that applied to incomes as low as $200,000. The extended tax applies only to incomes above $1 million for individuals and $2 million for couples. ***See added note at bottom of post.***
April 18, 2013
Dark = not so hot
Private employment in New York State grew by just 1.3 percent in March on a year-over-year basis, compared to the nation’s 1.9 percent growth during the same period, according to today’s employment report from the state Labor Department.
Continuing a longer-term trend, virtually all the job growth has occurred downstate, concentrated in New York City and Long Island, which grew by 1.8 percent and 2.1 percent, respectively. However, private employment in the Westchester-Rockland-Putnam region of the lower Hudson Valley has grown by just 0.5 percent since March 2012.
Upstate’s growth over the past year is also just 0.5 percent. The Elmira, Binghamton and Utica areas all lost private jobs in the past year, and Rochester’s growth rate was zero, the new data indicate, while only Glens Falls (+1/.9 percent) and Kingston (up 2.9 percent) among upstate labor markets managed to match the national rate, and only Ithaca (at 1.7 percent) exceeded the statewide rate.
New York’s unemployment rate fell to 8.2 percent, compared to the national rate of 7.6 percent in March. The unemployment picture is the mirror image of job growth; the highest unemployment was concentrated in New York City (8.9 percent), while the number in the rest of the state is closer to the national average at 7.7 percent.
April 16, 2013
President Obama’s proposed cap on itemized federal income tax deductions for state and local taxes would cost New York residents $3.8 billion a year, according to a report released by Governor Cuomo’s office today. However, you’ll have to dig a little to find that number: Obama isn’t mentioned until page 11 of the 26-page document.
The opening section of the report (which is, by the way, useful and well-researched in most respects) focuses on how bad it would be for New Yorkers if the federal government were to completely eliminate the deduction for state and local taxes. However, no one in a position of authority in Washington is actually proposing such a thing. The much more more serious risk to New York is that the White House and Congress will agree to some form of limit on itemized deductions for high-income taxpayers, as Obama proposed in his budget last week (reviving a proposal he first trotted out three years ago).
April 11, 2013
New York is cited as “something of a case study in all that is wrong with Medicaid,” but also as a state “in the vaguard” of Medicaid reform, in a new National Affairs article by Paul Howard, director of Manhattan Institute’s Center for Medical Progress.
In a long article that could serve as a primer on Medicaid’s shortcomings as they relate to the current healthcare policy picture, Howard explains how Obamacare will give governors throughout the country leverage to press the federal government for much-needed “fixes to Medicaid that will help their states avoid a looming fiscal catastrophe.”
While Medicaid was supposed to provide care for the poor, Howard writes, there is little relationship between spending and health outcomes for program’s beneficiaries. Indeed, there is evidence that Medicaid is “deeply regressive,” spending more in wealthier states that get a lower federal reimbursement, he notes.
April 10, 2013
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President Barack Obama’s proposed federal budget revives his proposal to cap the value of itemized income tax deductions for the highest-earning 3 percent of taxpayers, a category starting at $200,000 of taxable income for single filers and $250,000 for married filers.
Under current law, if you’re in the 39.6 percent tax bracket, you get a 39.6 percent discount on the cost of items for which you claim deductions, assuming you’re not subject to the Alternative Minimum Tax (and if you make enough to be in that bracket, you’re probably beyond AMT range). Obama would reduce it to 28 percent, the highest tax rate in lower brackets.
By far the largest deduction claimed by high-income taxpayers, especially those earning $1 million and more, is for state and local taxes.
So guess which state’s tax base (with the possible exception of California’s) would be hit hardest by this change?