The future does not bode well for Long Island taxpayers.
State Comptroller Tom DiNapoli recently designated Nassau and Suffolk counties as exhibiting “significant fiscal stress” and both “have big issues to grapple with in the future."
Suffolk officials, so far, have failed to get their arms around their structural deficit. The county ran up a deficit of $156 million in 2012 and projects a $100 million shortage in 2013.
Despite the imposition of a control period by the Nassau Interim Finance Authority in January 2011, and despite a public employee wage freeze the county requested and received — it saved $215 million between 2012 and 2013 and is projected to save $185 million in 2014 — Nassau continues to incur GAAP operating budget deficits.
A NIFA analysis of the Nassau County 2014-2017 Multi-Year Financial Plan projects operating deficits of $104 million in fiscal year 2014, $157 million in fiscal year 2015, $199 million in fiscal year 2016 and $255 million in fiscal year 2017. It appears the county will not keep its 2011 promise to have a GAAP balanced budget in 2015.
The gloomy fiscal outlooks, plus high property taxes and a weak job market, are taking their toll. Between July 2010 and July 2012, the percentage of people on Long Island over 65 years of age increased by 4 percent while the percentage of people under 30 decreased by 4 percent. Many young people who go away to college are not returning. Struggling middle-class families are seeking employment opportunities in thriving low-tax states like Texas.
These phenomena leave retiring Long Island baby boomers and other seniors living on fixed incomes holding the bag, stuck paying a larger slice of the tax pie.
America’s leading political analyst, Michael Barone, in his excellent new book, "Shaping the Nation: How Surges of Migration Transformed America and Its Politics," confirms these demographic trends.
In places like Long Island, he observes, “high taxes produce revenues to finance handsome benefits and pensions for public employee union members . . . It’s hard to see how this benefits middle-class people making their livings in the private sector.”
So, Barone concludes, people are moving to low-tax states “that are providing jobs and living space where they can pursue their dreams and escape places that burden them with high costs and provide few middle-class amenities in return.”
This helps explain why the population in Texas, between 1970 and 2010, increased 160 percent to 25 million, while New York’s population went up only 8 percent, from 18 to 19 million.
Here are some other interesting comparisons between New York and Texas:
- Number of jobs created between April 2012 and April 2013: New York 111,000, Texas 326,000
- Top state income tax: New York 8.82 percent, Texas zero percent
- 2012 building permits issued: New York 24,872, Texas 135,514
- Ranking among states for best business environments: New York No. 49, Texas No. 1
- Rank among states, based on cost of living: New York 47, Texas 9
- Percentage of labor force in unions: New York 23.2 percent, Texas, 5.7 percent
- Dollar value of exports in 2012: New York $81.4 billion, Texas $264.7 billion
This comparison explains why middle class Long Islanders are racing to the exits. And if elected county officials in Nassau and Suffolk don’t begin to govern, fail to take on the vested interests and don’t make the tough cost-cutting decisions that produce genuinely balanced budgets, it will only get worse.
Expect skyrocketing tax rates and the continued flight of the middle class to greener economic pastures.
George J. Marlin, a former executive director of the porta uthority of N.Y. and N.J., is the author of "The American Catholic Voter: Two Hundred Years of Political Impact." He also is a columnist for TheCatholicThing.org and the Long Island Business News. Read more reports from George J. Marlin — Click Here Now.
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