By Andrew M. Cuomo
Too often the debate in Albany focuses on insider skirmishes or, in the instance it involves policy, is framed in a nonsensical fashion. The “no-tax communities” proposal I put forth to jump-start upstate New York is too important to fall victim of the normal dynamic.
The “no-tax proposal” is the boldest idea for upstate in decades. It is bold because it is honest in its analysis and dramatic in its prescription. We will never solve a problem we fail to recognize.
Upstate has been in decline for decades. The combination of population loss and export of jobs makes the cost of government overly taxing on those who remain. The state pays 33 percent of Buffalo’s budget, 24 percent of Syracuse’s budget and 18 percent of Rochester’s budget. If the population and economics continue to deteriorate at this rate, the business environment will go further into a negative spiral. The state has tried dozens of economic development programs over the years with little success. Some say the patient is doomed. I don’t agree, but the condition is dire and the remedy must be sure and swift.
Today’s economy grows from higher education facilities. Business is attracted to low-tax environments. We are competing and losing to low- and no-tax states. The downstate economy is, and has been, performing much better than upstate and, as the political power is concentrated downstate, upstate has not gotten the attention it deserves.
The prescription: no-tax communities based around the SUNY system. This would even the playing field with the nation’s lowest-taxed states overnight. It is a massive approach, establishing tax-free areas larger than all the commercial space in Buffalo, Rochester and Syracuse combined.
The SUNY focus brings the concentration of the approach to upstate. There would be eight areas in downstate versus 55 upstate. Three million square feet will be available for private schools through a competitive bid process.
Albany pundits say broad-based tax reduction is preferable to relief in targeted areas. This is true but irrelevant. We have cut taxes and will continue to, to the extent it is financially feasible. But it is important to recognize the math here: a one-point income tax reduction statewide costs approximately $6 billion. A two-point reduction would cost the state $12 billion. This is an incredible sum, and even then our tax rate would still be higher than most of our competitor states.
Also, the vast majority of the across-the-board cuts goes to downstate. Our focus must be on upstate, which needs dramatic tax relief to be competitive.
Time is not our friend. Upstate cannot survive another decade like the last.
Sometimes a situation demands aggressive treatment lest the body is overwhelmed. We are in that situation.
The good news is we are capable of the cure. All we need is the will.
Andrew M. Cuomo is the governor of New York State.