Leaving New York: No Mystery as to Why People Flee the Once-Empire State

by Ray Keating

The Keating Files – February 5, 2020

Depending on how the rest of the day is going, politicians can make you laugh or cry. That’s especially the case in New York. But even when laughing, it’s dark, cynical humor.

Consider the example of two members of the New York state legislature – State Senator Jim Tedisco (R) and Assemblyman Angelo Santabarbara (D) – who recently announced that they were going to get to the bottom of why people are leaving New York. Seriously?

The two politicians plan to do an online questionnaire, host roundtables, and put a report together. In a statement, Santabarbara said, “Let’s reach out to New Yorkers to find out what’s happening.” And Tedisco added, “The elephant in the room that our state government’s not talking about is why New York State is number one for highest population loss in the nation?”

New York shipping people off to other states isn’t exactly a new development.

How bad has it been? Net domestic migration measures the change in a state’s population less births, deaths and international migration. That is, it captures population movement between the states. New York had the worst record from 2010 to 2019 by losing a net 1,379,210 people to other states. And from 2000 to 2009, New York again was tops in shipping people off to other states, with net domestic migration of -1,686,583. From 1990 to 1999, when New York lost a net of 1,888,936 in population to other states, that wasn’t the worst. It was second worst, with only California losing more people to other states.

In terms of total population, from the early nineteenth century to 1970, New York had the largest state population. Then it was passed by California. Texas moved by New York into the number two spot in 1994, and Florida bumped New York from number three in 2014. 

If it weren’t for international immigration, New York would be a ghost state. And in fact, New York’s total population has declined for the last four years in a row, that is, in 2016, 2017, 2018 and 2019.

So, isn’t it nice that a couple of New York politicians have gotten around to starting to ask questions about this decades-long trend? But they don’t need polls or roundtables. It’s obvious why people have been fleeing New York. 

For example, New York inflicts very high personal, corporate and capital gains taxes. 

Indeed, consider what passes for corporate tax reform in New York. Before the reform passed in 2014, the total corporate income tax rate for businesses in the lower part of the state – the stated tax rate plus a business tax surcharge – came in at 8.307 percent. In 2020, the rate stands at 8.864 percent. Yes, that’s right, the corporate income tax rate for the bulk of businesses in the state is higher after “tax reform.” Only in New York.

Property taxes as a share of personal income in New York also are sixth highest in the nation, according to the latest Census Bureau data. That’s a state average, by the way. The property tax burden is much higher in places like Westchester and on Long Island.

Gas and diesel taxes are among the nation’s highest. Sales taxes are high. The list goes on and on.

The entire state tax, regulatory and spending regime is overtly hostile to entrepreneurship, business and investment. The Small Business & Entrepreneurship Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth,” which I author, ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures. New York ranked an abysmal 47^th, or fourth worst, among the states. 

Crush business with burdens, and the result is reduced opportunity for all.

So, it’s no secret why people have been leaving New York: It’s overwhelmingly about intrusive, costly big government inflicting all kinds of burdens on individuals, families, entrepreneurs, businesses and investors. Why live, work, invest, and/or start up and build a business in New York when New York is so overtly hostile to working, investing, entrepreneurship and business? One can move to almost any other state in the nation, and by doing so, expand opportunity and improve quality of life.

Tedisco said that “our state government’s not talking” about why people are leaving New York. Golly, I’m just shocked. After all, the reasons for this long, vast exodus have been the decisions made by those in state (and local) government. 

Will this legislative report serve as a catalyst for substantive change in New York? That’s funny (again, dark humor). More typically, like so many other reports generated by government, it will get brief attention and then be forgotten. And politics as usual will continue in the once-Empire State. 

Hmmm, it seems like the only real answer is to, well, leave New York.

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Ray Keating is a columnist, an economist, a novelist (his latest novels are The Traitor: A Pastor Stephen Grant Novel, which is the 12^thbook in the series, and the second edition of Root of All Evil? A Pastor Stephen Grant Novel with a new Author Introduction), a nonfiction author (among his recent works is Free Trade Rocks! 10 Points on International Trade Everyone Should Know), a podcaster, and an entrepreneur. The views expressed here are his own.