The Rockefeller Institute of Government came out with a report this week about the regional distribution of revenue and spending in the 2009-2010 New York State budget. Basically, they said that New York City and its Downstate suburbs contribute more money to the state’s budget than they get back. Upstate takes a portion of the tax and revenue money contributed by the city and its surrounding suburbs, receiving more from the budget than it contributes. Sounds unfair, right?
Let’s remember that everyone pays taxes. The state collects on everything from income tax and university tuitions to drivers’ license fees. Each region pays more in specific areas. Per capita income is lowest in the Upstate region, so Downstate contributes a higher percentage to the state’s income tax. While Upstate does not generate as much economic activity and income as Downstate does (despite having the second-largest population in the state), it does contribute a higher percentage to the state in the forms of motor fuel taxes as well as alcohol and cigarette taxes. At least this makes it look like we have more fun!!
There are other reasons for the discrepancy. New York City receives a larger share of state-funded assistance for both transportation and Medicaid. Think of the subway it needs to maintain and that starts to make sense. Upstate, on the other hand, receives more of the state’s operations expenses because a disproportionate amount of prisons and universities are located in the region.
The reality is that we in Upstate live in a regulatory environment that is largely driven by Downstate. What they can afford, we can’t. It is that simple. What we need to fix are the crazy laws and mandates that continue to hinder this process. We can start by looking at Unshackle Upstate’s joint Let NY Work agenda and reducing the costs of construction on public and private projects. We can readjust the pension system and employee health insurance contributions to make doing business in Upstate, and all over the state, more affordable.
The numbers from the Rockefeller report are not judgments, they’re facts. There are differences in budget distribution because there are differences within the regions. These numbers can be read as unfair or one-sided, or as a relatively balanced policy. They can also be read as a road map. If Downstate wants to see a larger contribution from its Upstate neighbors, then they need to support our recommended changes so our economy can thrive and we’ll have more to give.
Our 2012 policy agenda will be out soon. It will outline very clearly what needs to be fixed either legislatively or through the regulatory process. The plan should be embraced by all New York residents regardless of where they live. The agenda is about unlocking our potential, so that we can get our economy moving…not our people.