STATE OF THE WEEK: New York – The Weather? It’s the Policy Climate Driving People Away

By at 3 October, 2018, 9:43 am


New York ranks near the very bottom on SBE Council’s “Small Business Policy Index 2018.” Yet, Governor Andrew Cuomo says it’s the weather driving people out of New York State. Small business owners know better.

by Raymond J. Keating-

Small Business Policy Index 2018: New York ranked 47th – or fourth worst – among the 50 states.

SBE Council’s “Small Business Policy Index 2018” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements. 

Small Business Tax Index 2017: New York ranked 43rd – or eighth worst – among the 50 states.  

SBE Council’s “Small Business Tax Index 2017” ranks the states according to 26 different tax measures. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

More than other people, politicians seem to possess an innate ability to talk themselves into very odd positions. This includes, apparently, Andrew Cuomo, governor of New York.

Governor Cuomo is up for re-election in November. On the campaign trail recently, he blamed a continuing exodus of New Yorkers to other states on the weather. As reported by the Associated Press:

Cuomo told reporters Tuesday that while job losses and high taxes once drove people to leave New York, his administration has reversed that trend and improved the local economic situation.

As for those New Yorkers who have made more recent moves to Florida, the Carolinas or other states, Cuomo said their decisions were “climate based” or “based on personal reasons.”

“There are more jobs than ever. Our taxes are lower than ever,” he told reporters after a speech at the Business Council of New York State’s annual conference at Lake George. “People were leaving upstate New York because they had to. … That is no longer the case. Somebody wants to move to Florida because they want to move to Florida. God bless them. They want to fish. They want warm weather.”

Hmmm, really?

Well, that’s not the case according to the Small Business Policy Index 2018: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, which I write for the Small Business & Entrepreneurship Council. New York actually serves up the fourth worst public policy climate for entrepreneurship and small business among the 50 states.

The “Small Business Policy Index” arguably offers the most comprehensive comparison of the states in terms of policy decisions affecting the economy, and the list of negatives for New York is incredibly long. Consider, for example, that New York has high personal income, individual capital gains, corporate income, corporate capital gains, property, consumption-based, gas, diesel and wireless taxes. It also imposes a death tax. But there’s more. New York also imposes the most costly energy regulatory burden; an added minimum wage burden; high workers’ compensation costs; a high level of state and local government workers; the highest level of state and local government debt; and the second highest level of state and local government spending. Yikes, and the list goes on.

In terms of its weather and natural beauty, New York actually is an attractive and engaging state.

Yet, from 2010 to 2017, for example, New York lost 1.02 million people net to other states (change in population less births, death and international migration). No other state was even close to hemorrhaging that many people. New York lost 847,000 people net to other states.

New York’s losses from 2010 to 2017 came after losing 1.7 million to other states from 2000 to 2009, and 1.9 million from 1990 to 1999.

New York’s problem is not the natural climate – that is, the weather – instead it’s about the policy climate, that is, tax, regulatory and other governmental burdens that chase away entrepreneurs, businesses and people.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

News and Media Releases