New York’s economic competitiveness is defined by its ability to attract and retain residents and businesses through its tax structure, housing affordability, public infrastructure, and the quality of its public services. This page covers CBC’s work on tax policy, housing production and zoning, economic development incentives, transit infrastructure financing, and resident satisfaction.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State should spend less, not more, than the executive budget proposed to avoid making our State less competitive.
The State must ensure its own fiscal stability, and any one-time aid should serve as a bridge with the condition that the City is accountable for bringing spending in line with its current revenue base.
The State should implement SEQRA reform to ensure a broad, ambitious program for delivering needed infrastructure, omitting a source of delay and obstruction across building types crucial for New York’s future.
The State should adopt the Governor’s proposal to reform New York’s auto insurance laws, which can help rationalize the system and save New York residents and businesses as much as $2 billion a year.
Rather than sending rebate checks to New Yorkers who may not need them, the State should be saving these resources as a hedge against the looming risks of economic uncertainty and federal cuts.
Key Data
In August 2026, the CBC reported that New York State's share of the nation's millionaires edged up to 9% in 2023 from 8.7% in 2022, but remained well below its 12.7% share in 2010, costing the State and City nearly $12 billion in lost personal income tax revenue in 2023 alone.
An April 2026 analysis highlighted that New York's economic competitiveness is threatened by outmigration, with 114,000 more people leaving New York City for other U.S. destinations than arriving last year, and the state losing a net of 41 publicly traded company headquarters between 2020 and 2025.
According to testimony from February 2026, New York State and its localities collect the most taxes per person in the country, which is 78% more than the national average and 40% more than California, while New York City residents face the nation's highest combined top marginal personal income tax rate of 14.776%.
In September 2025, the CBC noted that New York City's high construction costs limit housing growth, driven by labor costs that are 10% higher than San Francisco's and double Houston's, alongside the state's Scaffold Law which increases total development costs by at least 7%.
A June 2025 resident survey revealed that only 34% of New Yorkers rated the city's quality of life as excellent or good, down from 51% in 2017, with the top cited reasons for considering moving out being affordability (76%) and safety (73%).
New York State and its localities collect more taxes per capita than any other state, eclipsing second-place California by 22% and collecting 71% more than the national average in fiscal year 2024. To improve competitiveness, the state must hold the line on taxes and focus on increasing government efficiency and the quality of public services.
Recommendations related to Competitiveness
New York should hold the line on or preferably reduce taxes.
New York should focus on improving the quality of critical services, prioritizing policies and programs that enhance affordability and quality of life, and increasing government efficiency so New Yorkers get more for their money.
New York should improve the quality, consistency, and reliability of critical public services.
New York should prioritize policies and programs that enhance affordability and quality of life.
New York should increase government efficiency so taxpayers receive stronger results for their money.
Key Data
$99 Billion
— Amount New York State and local governments would have saved if they spent like neighboring New Jersey in fiscal year 2024.
$143 Billion
— Amount New York State and local governments would have saved if they spent like Texas in fiscal year 2024.
22%
— Percentage by which New York's per capita tax collections eclipsed second-place California in fiscal year 2024.
71%
— Percentage more per person New York collected in taxes than the national average in fiscal year 2024.
44%
— Percentage more per capita New York spent than the national average in fiscal year 2024.
$170 Billion
— Amount New York would have saved in fiscal year 2024 if it spent like Florida.
Although New York State's share of the nation's millionaires ticked up slightly to 9.0% in 2023, the long-term decline since 2010 has cost the state and city nearly $12 Billion in lost personal income tax revenue. This loss highlights the critical role of high earners, who represent less than 1% of taxpayers but contribute 43% of state and 38% of city income taxes.
Key Data
9.0%
— New York State's share of the nation's millionaires in 2023, which ticked up from 8.7% in 2022 but remains well below the 12.7% share held in 2010.
$12 Billion
— The approximate amount of additional personal income tax revenue New York State and City would have received in 2023 if they had maintained their 2010 share of the nation's millionaires.
43%
— The share of New York State's personal income taxes paid by millionaires in 2023, despite representing less than 1% of resident filers.
3.7
— The percentage point decrease in New York State's share of the nation's millionaires between 2010 and 2023.
1,270
— The number of additional millionaires Florida had compared to New York State in 2023, even after Florida experienced a year-over-year decrease.
16.6%
— California's share of the nation's millionaires in 2023, which grew by 2.3 percentage points since 2010.
Mayor Mamdani's "Block by Block" housing plan aims to increase housing production by streamlining review processes, maximizing development strategies for public housing, and reforming building codes to address the city's exceptionally high construction costs. By leveraging state and federal resources alongside private sector partnerships, the initiative seeks to improve housing availability and affordability in a challenging economic environment.
Recommendations related to Competitiveness
The City should take full advantage of State and federal resources and partner with the private sector to deliver the housing that New Yorkers need.
The City should take a critical look at the City’s building codes, including unique requirements for elevators and plumbing that contribute to New York having the world’s highest construction costs.
The City should leverage newly streamlined review processes to build more housing in neighborhoods that for too long have resisted growth to boost production.
$124.7 billion is the amount Mayor Mamdani proposes to spend in fiscal year 2027. The budget process is never simple, but this year the intensity ratcheted up. Revealing a large budget gap, the City administration negotiated with the State for aid to bridge it while simultaneously pursuing its ambitious programmatic…
Accelerating housing production and occupancy in New York City is essential to reducing costs and addressing the housing crisis. Implementing these reforms will help create a more affordable and competitive environment for all residents.
New York City faces significant economic headwinds characterized by rising outmigration, a decline in business headquarters, and high housing costs that consume half of the median household income. To maintain competitiveness, the city must address these challenges by adopting a sound budget that improves service efficiency, holds the line on taxes, and eliminates ineffective spending.
Recommendations related to Competitiveness
The mayor and City Council should adopt a sound budget that improves services, expands effective programs, eliminates ineffective ones, enhances affordability and holds the line on taxes.
Relief from Albany’s class size mandate could unlock $1.2 billion while preserving smaller classes where they matter most.
Aligning school budgets with declining enrollment could save $400 million.
Fixing procurement could yield $700 million.
Maintaining current city-funded housing vouchers would save $330 million.
The mayor’s $1.1 billion recurring savings target is woefully insufficient; the Chief Savings Officers must dig deeper to eliminate spending that isn’t serving people well.
Key Data
114,000
— more people left New York City for other places in the U.S. than came here last year.
41
— decline in the number of publicly traded company headquarters in New York State between 2020 and 2025.
6,350
— net businesses lost by New York City in the first three quarters of 2025.
$3,800
— average monthly asking rent in New York City, which consumes half of the median household income.
38%
— higher tax collection per person in New York compared to New Jersey.
$3.5 billion
— amount the city projects it will spend over its revenue this year.
New York's state budget is late for the fifth consecutive year, creating risks of short-term decision-making that could lead to fiscal instability and weaken economic competitiveness. To ensure long-term fiscal health and maintain the state's appeal to residents and businesses, the state must curb spending growth, focus on program quality, and avoid increasing the nation-leading tax burden.
Recommendations related to Competitiveness
Hold the line on spending, ensuring any additional spending is offset with savings elsewhere to curb ballooning spending growth.
Hold the line on taxes, as New York State and its local governments already collect the most taxes per person in the country.
Reject costly, unnecessary Tier 6 pension enhancements that may drive property tax increases or service cuts.
Bolster and protect reserves, as the $14 billion in principle reserves is less than half of what the State Division of the Budget reports is the low-end impact of a recession.
Help New York City—smartly, such as by relieving the class size mandate, which would save the City $1.2 billion.
Key Data
$30 billion
— Amount spending has increased more than inflation in the last decade.
$5 billion
— Amount the Legislature proposes to add to spending next year.
$3 billion
— Amount the Legislature proposes to add to spending annually thereafter.
$12.8 billion
— Size of the Executive Budget gaps in fiscal year 2030.
$14 billion
— Amount in principle reserves.
$1.2 billion
— Savings for the City if the class size mandate is relieved.
New York's high tax burden and regulatory environment threaten its economic competitiveness, as evidenced by a significant decline in the state's share of the nation's millionaires. To reverse this trend and improve affordability, the state must reject proposed tax increases, streamline environmental reviews for housing, and reform auto insurance laws to lower costs.
Recommendations related to Competitiveness
Reject harmful tax increases; increasing personal income or business taxes would risk further shrinking New York’s share of the nation’s high earners that pay significant taxes, and squeeze businesses that create jobs.
Reform SEQRA to boost housing supply and affordability, as lengthy environmental reviews increase costs and delay development.
Reform auto insurance to lower costs, as the proposed liability reforms could reduce premiums by up to 10 percent, saving $200 per vehicle.
Target childcare investments by focusing childcare funding on families with the greatest financial need to help sustain program funding.
Recalibrate emissions reduction targets and adopt standard accounting to drive programs that balance decarbonization with affordability and job growth.
Reject ineffective energy spending, such as adding $1 billion in Sustainable Future capital spending when other funds are available.
Enact the lower-income tax credit for filers with dependents, supported by spending offsets.
Key Data
31 percent
— New York's share of the nation's millionaires plummeted 31 percent between 2010 and 2022.
$13 billion
— Had New York’s shares stayed at 2010 levels, the State and City would have collected more than $13 billion in additional personal income tax revenue.
21.37 percent
— New York City’s nation-leading combined business tax would reach 21.37 percent, nearly double New Jersey’s 11.5 percent top rate.
11.5 percent
— New York City’s nation-leading combined business tax would reach 21.37 percent, nearly double New Jersey’s 11.5 percent top rate.
$82,000
— A two-year delay in housing development increases the cost of each unit up to $82,000 in New York City.
32 percent
— In 2023, New Yorkers spent 32 percent more than the national average on auto insurance per vehicle.
New York State's current climate goals risk hindering economic growth and competitiveness by imposing unattainable targets that increase household costs and strain the state budget. A reality-based approach is necessary to balance emission reductions with affordability and job creation to ensure the state remains economically viable.
Recommendations related to Competitiveness
New York State’s leaders should recalibrate the CLCPA’s emission reduction goals and adopt the emissions accounting used by other states to improve economic competitiveness.
The State should reset its goals to be ambitious but attainable enough to underpin policies and investments that are affordable and promote economic growth and competitiveness.
The State should be able to clearly identify the full cost and impact of every proposal and program to all residents, businesses, and the State budget, as well as the impacts on jobs across sectors and regions, to ensure long-term economic competitiveness.
New York City's fiscal plan relies on tax increases that threaten the city's economic competitiveness and affordability, rather than implementing necessary structural reforms. Instead of raising taxes, the city should focus on reducing ineffective spending and improving operational efficiency to close its $9.4 billion budget gap.
Recommendations related to Competitiveness
Reject tax increases that would harm the City’s economic competitiveness and place additional burdens on residents and businesses.
Reduce ineffective spending and improve operational efficiency, including spending on education, procurement, and administrative operations.
Right-size spending in areas where demand has changed, such as adjusting school funding to reflect declining enrollment and managing the growth of the FHEPS housing voucher program.
Build and maintain adequate reserves by not drawing down the rainy day fund or RHBT and including $1 billion of in-year reserves, which will help protect the City against economic downturns and unexpected fiscal shocks.
Key Data
$9.4 billion
— The combined fiscal year 2026 and 2027 budget gap.
$16 billion
— The amount by which fiscal year 2026 spending exceeds what it would have been if it had grown at the rate of inflation since fiscal year 2017.
$3.7 billion
— The revenue generated from the proposed property tax increase.
$1 billion
— The amount of recurring annual savings included in the Preliminary Budget.
2.2 percent
— The average annual productivity increase in the private sector.
New York faces a $20 billion structural budget gap and fierce competition for residents and businesses, necessitating a more disciplined approach to spending rather than increasing taxes. To improve economic standing, the state should prioritize fiscal stability, implement regulatory reforms like SEQRA and auto insurance changes, and preserve resources instead of issuing rebate checks.
Recommendations related to Competitiveness
The State should spend less, not more, than the executive budget proposed to avoid making our State less competitive.
The State must ensure its own fiscal stability, and any one-time aid should serve as a bridge with the condition that the City is accountable for bringing spending in line with its current revenue base.
The State should implement SEQRA reform to ensure a broad, ambitious program for delivering needed infrastructure, omitting a source of delay and obstruction across building types crucial for New York’s future.
The State should adopt the Governor’s proposal to reform New York’s auto insurance laws, which can help rationalize the system and save New York residents and businesses as much as $2 billion a year.
Rather than sending rebate checks to New Yorkers who may not need them, the State should be saving these resources as a hedge against the looming risks of economic uncertainty and federal cuts.
Key Data
$20 billion
— The size of the State's structural budget gap.
$2 billion
— The amount New York residents and businesses could save annually through auto insurance reform.
78 percent
— The amount more New York State and its localities collect in taxes per capita compared to the national average.
40 percent
— The amount more New York State and its localities collect in taxes per capita compared to California.
37 percent
— The amount more New York State and its localities collect in taxes per capita compared to New Jersey.
10 percent
— The minimum percentage by which insurance reform has been shown to lower premiums in other states.
New York's high tax burden, which leads the nation, is eroding the state's competitive foundation by driving away high-income earners and businesses. Instead of raising taxes, the state and city should prioritize efficient service delivery to maintain affordability and attractiveness.
Recommendations related to Competitiveness
We urge you to hold the line on taxes.
Do not include State or City tax increases in your one-house or the enacted budgets.
The State and New York City should double down on getting the most out of their budgets by efficiently delivering the right high-quality services.
Key Data
14.776 percent
— Combined top marginal personal income tax rate for New York City residents.
17.44 percent
— Business activity tax rate in New York City.
43 percent
— Share of New York State’s personal income taxes paid by filers with income over $1 million in 2023.
140,000
— Number of more people who moved from New York State to other parts of the country than moved in during 2024.
41
— Number of publicly traded company headquarters lost by New York between 2020 and 2025.
$76 billion
— Potential savings if New York State and its localities spent like New Jersey.
New York's auto insurance market is currently among the most expensive in the nation, with residents paying $24 billion in premiums in 2024 while insurers struggle with profitability due to liability laws. Implementing proposed reforms to the state's no-fault and liability standards could save residents and businesses $2 billion annually, enhancing the state's affordability and economic competitiveness.
Recommendations related to Competitiveness
Redefine the “serious injury” threshold to limit the ability of drivers with minor or non-permanent injuries to sue for damages beyond the no-fault limit, while preserving the right to sue for those with the most substantial injuries.
Allow drivers to recover non-economic damages only if the injured driver is not at fault, which would align New York with the modified comparative liability standard used in most other states.
Cap non-economic damages in cases where drivers are uninsured or get into accidents while breaking the law to limit the outsized awards that contribute to rate increases and insurers’ mounting losses.
Protect defendants against joint and several liability claims to ensure that defendants are only on the hook for the share of damages that are their fault.
Key Data
$2 billion
— Estimated savings for New York residents and businesses if the proposed auto insurance reforms are implemented.
$200
— Minimum annual savings per vehicle for New Yorkers if premiums shrink by 10 percent.
10 percent
— Potential reduction in New Yorkers' auto insurance premiums if the state achieves savings realized in other reformed markets.
$24 billion
— Total amount paid by New Yorkers in auto insurance premiums in 2024.
$1,896
— Average auto insurance premium in New York in 2023, which was 32 percent higher than the national average.
17 percent
— Loss incurred by insurers on auto insurance in the New York market in 2023 after expenses.
New York City faces fiscal challenges driven by excessive spending growth rather than insufficient revenue, necessitating operational improvements to maintain fiscal sustainability. Avoiding tax increases is crucial, as the city already holds the nation's highest tax burden and further hikes would undermine its economic competitiveness.
Recommendations related to Competitiveness
The City should avoid tax increases, as New York already carries the highest overall tax burden in the nation and further hikes would weaken the City’s competitiveness.
The City should pursue operational improvements to strengthen its finances, which offers an opportunity to balance the budget without undermining its competitiveness or placing additional burdens on residents and businesses.
Agencies should identify efficiencies by aligning staffing and workload, streamlining administrative functions, and leveraging technology to automate manual processes, which helps maintain the high-quality services necessary to justify the City's costs.
The City should implement a multi-year improvement plan that emphasizes recurring savings driven by productivity, service redesign, and evidence-based impact to ensure fiscal sustainability.
The City should augment current efforts with a citywide, data-driven management framework that supports continuous improvement and ensures reforms translate into lasting savings.
Key Data
$2.3 billion
— The amount the City spent more than it received over the past three years, highlighting the need for fiscal reform.
$15 billion
— The amount the City would be spending today if spending growth had merely kept pace with inflation over the last decade.
New York City faces a significant budget shortfall and must prioritize government efficiency and operational reform over tax increases to maintain its economic competitiveness. By streamlining agency operations, updating labor relations, and seeking relief from costly state mandates, the city can improve public services and fiscal stability without further burdening businesses and residents.
Recommendations related to Competitiveness
The City should cut unproductive spending and streamline operations using technology and eliminating wasteful bureaucratic processes.
The Mayor should set ambitious minimum savings targets to generate options for strategic choices that focus programs without harming New Yorkers.
The Administration should implement a citywide performance management system to improve services and guide smarter budget decisions.
The City must update 20th Century labor relations, technology, and bureaucratic processes to meet 21st Century needs.
The Mayor should request relief from Albany’s class size mandate that costs the City $1 billion, partly to support high-performing schools serving low-need students.
Key Data
$3 billion
— Annual cost to the City due to the shrinking share of the nation's millionaires.
17.44%
— Top combined corporate tax rate in New York City, compared to 11.5% in New Jersey.
$15 billion
— Amount lower the City's spending would be today had it kept pace with inflation since 2017.
19%
— Increase in City spending since 2017.
11%
— Percentage of New Yorkers who believe the government uses their money wisely.
$1 billion
— Cost to the City of Albany’s class size mandate.
Reforming the State Environmental Quality Review process is essential to reduce development costs and improve economic competitiveness by aligning New York with other states that have already streamlined their review requirements. Implementing these changes would lower the financial burden on housing and infrastructure projects, making the state a more affordable place to live and conduct business.
Recommendations related to Competitiveness
Exempting modest residential development from the State Environmental Quality Review process would make building housing cheaper and faster without additional costs to the government.
Exempting water facilities, parks, and resiliency retrofits from the review process would reduce the cost of projects that improve the environment.
Imposing deadlines on State and local agencies to sign off on environmental reviews would ensure reasonable and predictable timelines and avoid the death spiral of mounting cost increases and uncertainty.
Key Data
11%
— Local environmental review increases development costs for 500-unit projects by 11%.
$82,000 per unit
— Local environmental review increases development costs for 500-unit projects by $82,000 per unit.
10%
— Environmental review can increase costs by 10% for modest, low-rise residential projects.
$35,000 per unit
— Environmental review adds $35,000 per unit in costs for residential projects in cities like Rochester or Buffalo.
$40,000 per unit
— Environmental review adds $40,000 per unit in costs for residential projects in the Mid-Hudson region.
$45,000 per unit
— Environmental review adds $45,000 per unit in costs for residential projects on Long Island.
New York State's fiscal strategy must prioritize affordability and core programs to maintain economic competitiveness for families and businesses, rather than relying on tax surcharges or wasteful spending. By scaling back ineffective economic development programs and reducing aid to wealthy school districts, the state can improve its financial stability and attractiveness.
Recommendations related to Competitiveness
The State should target programs to those in need and fund them by scaling back less impactful spending, including wasteful economic development programs and school aid to shrinking and wealthy districts.
The Governor and Legislature should make the smart choices—holding the line on taxes, prioritizing core programs, and not adding unaffordable spending—to improve New York State’s affordability, sustain programs, and ensure New York is attractive to families and businesses.
The State should add to the funds, and not use the reserves to offset recurring federal cuts.
The State should take additional steps to restrain growth in CDPAP and long-term care.
Key Data
17.44 percent
— The rate at which business activity in New York City will continue to be taxed due to the extension of the business tax surcharge.
$5.1 billion
— The amount New York State spent on economic development in fiscal year 2025, comprising $3.3 billion on tax breaks and $1.8 billion on direct spending.
$2.6 billion
— The amount of education aid directed to districts that self-fund a sound basic education with local and federal resources in school year 2026.
$469 million
— The amount of hold harmless funds that maintain or grow Foundation Aid to districts with declining enrollment.
New York's future competitiveness depends on maintaining tax stability and focusing state resources on programs that deliver measurable results. To ensure long-term fiscal health, the state must prioritize funding for those in greatest need while implementing reforms to lower housing and insurance costs.
Recommendations related to Competitiveness
Reforming environmental review is an important step to make production of much-needed housing cheaper and faster at no cost to the State.
Lowering auto insurance costs would keep money in New Yorkers’ pockets.
The State should hold the line on taxes to continue to bolster New York’s competitiveness.
The State must focus its money and management on programs that deliver results to ensure sustained competitiveness.
The Governor should target new programs to those in greatest need, fund them sustainably, and stabilize New York’s precarious future finances.
17 is the number of days, at the time of this conversation’s recording, before Dean Fuleihan becomes First Deputy Mayor for a second time. As Mayor-Elect Mamdani turns from campaigning to the practicalities of governing, First Deputy Mayor Fuleihan will be an expert hand involved in every step. On this…
New York faces significant economic challenges, including high costs of living and doing business, which have led to a population decline compared to the rest of the nation. To improve competitiveness, the state must prioritize housing production, reduce regulatory burdens, and maintain fiscal discipline to attract residents and businesses.
Recommendations related to Competitiveness
State leaders should supercharge housing production, especially downstate, by streamlining environmental review, promoting transit-oriented development, and reforming tax incentives to make development financially feasible.
To reduce the cost of doing business, the state should eliminate unnecessary regulations, reform the tort system to lower insurance costs, and allow the business tax surcharge to expire.
The state should leverage proven, cost-effective tax incentives to attract and retain businesses while shrinking or eliminating programs that fail to create jobs or increase output.
State leaders should hold the line on taxes to demonstrate a commitment to a competitive future, as increasing already-high taxes threatens competitiveness and risks accelerating outmigration.
Key Data
4.7 percent
— The growth rate of New York State's population since 2000.
20.9 percent
— The growth rate of the nation's population since 2000.
12 percent
— The decline in public school enrollment in New York since 2021.
New York City's high-income residents and businesses already face some of the highest tax rates in the nation, which risks shrinking the tax base and undermining long-term economic vitality. To maintain competitiveness and ensure fiscal stability, the city must avoid further tax increases and instead focus on disciplined financial management, efficient service delivery, and strategic resource allocation.
Recommendations related to Competitiveness
The administration should hold the line on taxes because increasing rates makes the city less attractive to high-income residents and businesses.
The city should realign its own funds to improve affordability, serve the neediest New Yorkers, and maintain New York's competitiveness in the face of federal policy changes.
The Mayor should pursue a collaborative relationship with labor that recognizes their shared interest in a thriving city and a sustainable, efficient municipal government that provides good careers for its employees.
Key Data
17.44%
— The top combined marginal corporate tax rate in New York City, comprising the 8.85% City rate, 6.61% State effective rate, and 1.98% effective rate for the MTA surcharge.
13.5% to 14.8%
— The range of combined State and City top marginal personal income tax rates for households with adjusted gross income greater than $2.2 million.
4.2%
— New York City's share of the nation's millionaires in 2022, a decline from 6.5% in 2010.
$2.5 billion
— The additional revenue the City would have received in tax year 2022 if its share of the nation's millionaires had remained constant at 2010 levels.
New York City's share of U.S. millionaires fell 35% between 2010 and 2022, while the city's combined top marginal tax rate of 14.776% remains the highest in the nation. To remain competitive and reverse the trend of losing high-income residents, the city must improve its value proposition by expanding housing production, ensuring clean and safe streets, and delivering efficient public services.
Recommendations related to Competitiveness
Expanding housing production to improve affordability is paramount to ensuring that living in New York remains feasible and attractive for a broad range of residents.
Clean and safe streets are equally vital, providing the order and quality of life that residents, businesses and visitors deserve.
High-quality and efficient public services — from transit to education — support a prosperous city.
Stable public finances preserve services for all New Yorkers.
Key Data
40%
— of New York’s personal income taxes were paid by filers with adjusted gross income over $1 million in 2022.
35%
— is the amount the share of U.S. millionaires living in New York City fell between 2010 and 2022.
14.776%
— is the combined top marginal tax rate for the highest earners in New York State and City, which tops the nation.
91,000
— more residents moved out of the city to other parts of the U.S. than moved in during 2024.
$2.5 billion
— is the amount of additional personal income tax revenue the City would have collected in 2022 if it had maintained its 2010 share of millionaires.
Requiring prevailing wages for off-site construction components would significantly increase project costs and timelines, discouraging the use of efficient modular building methods. This mandate would likely cause off-site producers to avoid bidding on New York projects, forcing reliance on more expensive and disruptive on-site construction.
Recommendations related to Competitiveness
The Governor should veto A2747A/S2536A to allow the City and State to continue to use off-site custom fabrication without prevailing wages when it would reduce the time or cost of a capital project.
Key Data
20 percent to 50 percent
— Modular building can accelerate project delivery by 20 percent to 50 percent.
20 percent
— Modular building can reduce costs by up to 20 percent.
$1 million
— Prefabricated public restrooms were delivered at a cost of $1 million per structure compared to $3.5 million for the typical park bathroom built fully on-site.
30 percent
— Section 220 requires contractors to pay prevailing wages to workers on projects classified as public works or “covered projects,” which receive public subsidies that equal 30 percent or more of total costs.
New York's Draft State Energy Plan fails to adequately assess the economic impacts of the energy transition on businesses, potentially threatening the state's economic growth and competitiveness. The plan lacks detailed analysis on how higher energy costs will affect business viability and fails to quantify the broader economic consequences of its proposed pathways.
Recommendations related to Competitiveness
The State should quantify the impact on energy costs paid by businesses, by sector and geography, to better understand the economic implications of the energy transition.
Policymakers should broaden the jobs analysis to all sectors and scenarios, and disaggregate by geography, to fully assess the economic impact of the energy plan.
The State should quantify the costs and how they would be allocated to businesses and other entities to ensure the energy transition does not undermine economic growth.
Key Data
5 percent
— The portion of the State's jobs that are in the energy sector, which is the only sector the Draft SEP quantifies regarding economic impact.
$146 per MWh
— The contractual strike price for one of the State's current Offshore Wind Renewable Energy Credit contracts.
$155 per MWh
— The contractual strike price for one of the State's current Offshore Wind Renewable Energy Credit contracts.
$125 per MWh
— The assumed cost of offshore wind in 2025 in the Draft SEP, which is significantly lower than actual contract prices.
30 percent
— The portion of project costs that Production and Investment Tax Credits for clean energy can cover, the expiration of which will make future projects more expensive.
9 GW
— The State's offshore wind target by 2035, which is considered unlikely to be reached given recent changes in federal permitting.
New York City's housing affordability crisis is driven by exceptionally high construction costs, which are among the highest in the world due to labor expenses, restrictive regulations, and lengthy approval processes. To increase housing supply and improve economic viability, the city and state must modernize building codes, reform liability laws, and streamline permitting to reduce the financial burden on developers.
Recommendations related to Competitiveness
The City could align construction codes and regulations, which are often now bespoke to New York, with best practices from other global cities.
The State should repeal New York’s exceptional Scaffold Law and adopt the liability standards used in every other state in the country.
The City and State should focus on predictability and simplicity over site-by-site approval processes and complexity, with speedy permitting, as-of-right approvals and simple financing and design requirements for affordable housing.
The State should also reform environmental review laws to exempt beneficial projects.
The easiest way to address the high cost of land is rezoning to increase opportunities for development and chip away at the scarcity that drives up prices.
Key Data
1.4%
— The citywide vacancy rate, which is the lowest it has been since 1968.
$3,730
— The record-high asking rent for vacant apartments in July.
23%
— The cost increase for affordable projects with prevailing wage requirements.
$82,000
— The estimated increase in hard and soft costs per unit caused by a two-year discretionary review.
7%
— The increase in total development costs attributed to the Scaffold Law.
60%
— The portion of construction costs typically accounted for by labor and materials, known as hard costs.
New York's share of the nation's millionaires has significantly declined since 2010, resulting in billions of dollars in lost annual personal income tax revenue for the state and city. To ensure fiscal and economic viability, the state must improve its value proposition to better attract and retain high-earning residents who contribute a disproportionate share of tax revenue.
Recommendations related to Competitiveness
New York must prioritize efforts to retain and grow the number of millionaires to fund critically needed services.
Policymakers should avoid further tax increases, as raising taxes could accelerate the damaging trend of losing high-earning residents to competitor states.
The state must improve its overall value proposition, as New York's value proposition has not been attractive enough to keep up with millionaire growth nationwide.
Key Data
$34 billion
— Contribution of millionaires to New York's State and City personal income tax revenue in 2022.
31 percent
— The amount by which New York’s share of the nation’s millionaires plummeted between 2010 and 2022.
$10.7 billion
— Additional personal income tax revenue New York State would have collected in 2022 if it had maintained its 2010 share of millionaires.
$2.5 billion
— Additional personal income tax revenue New York City would have collected in 2022 if it had maintained its 2010 share of millionaires.
14.776 percent
— The marginal personal income tax rate for New York City residents earning over $25 million annually.
8.7 percent
— New York's share of the nation's millionaires in 2022, down from 12.7 percent in 2010.
New York City faces significant challenges, including population loss and fiscal instability, that threaten its status as a hub of opportunity. To restore its competitive edge, the city must prioritize fiscal discipline, improve service delivery, increase housing production, and maintain essential infrastructure.
Recommendations related to Competitiveness
Leaders should choose to trim spending to sustainable levels, build up rainy day funds during good times, and negotiate labor deals that balance fair wages with fiscal reality.
Leaders need to choose management systems that deliver results and hold officials accountable.
The city should focus on evidence-based programs in education and mental health and make the hard choice to eliminate ineffective initiatives.
The city must hold the line on taxes, pull out all the stops to boost housing production, make public spaces vibrant, and use only the tax incentives proven to grow our economy.
The city needs to get roads, bridges, and buildings into good shape to provide a foundation for the future economy.
Key Data
100,000
— Net residents lost by New York City to Florida between 2018 and 2022.
$13.7 billion
— Personal income lost by New York City to Florida between 2018 and 2022.
6 months
— The time it takes the city to place a homeless household into a newly constructed unit.
11%
— The percentage of New Yorkers who say the city is wisely spending its $115 billion annual budget.
New York City residents remain largely dissatisfied with quality of life, safety, and government services, with only 34% rating the city's quality of life as excellent or good. This persistent dissatisfaction, particularly regarding affordability and safety, threatens the city's ability to retain residents and maintain its competitive edge.
Recommendations related to Competitiveness
The City must make smart fiscal, management, and investment choices to ensure public safety, improve services, and enhance quality of life.
The City should target improvement efforts, policies, programs, and resources toward areas of persistent dissatisfaction, particularly in the Bronx and among Black and Hispanic New Yorkers.
The City must demonstrate responsiveness and a recommitment to the city’s foundational promise of providing a safe, livable, and opportunity-rich environment for all residents.
Key Data
34%
— New Yorkers who rate the city's quality of life excellent or good in 2025
55%
— New Yorkers who plan to remain in the city over the next five years
76%
— New Yorkers who cite affordability as a reason for considering moving out of New York City
63%
— Residents who rated their neighborhood an excellent or good place to live in 2017
56%
— Residents who rated their neighborhood an excellent or good place to live in 2025
42%
— New Yorkers who rate public safety in their neighborhood excellent or good
The Citizen Budget Commission’s Competitive NYC: Value Proposition Tracker makes complex data more accessible and understandable for every New Yorker. Other indicators will be added over time—we welcome your feedback—and the current data will be updated upon availability.
48,000 is the number of new homes to be created when we add together the 40,000 that should be enabled by 5 neighborhood rezonings and the current proposed plan to redevelop the Brooklyn Marine Terminal. New York must dramatically increase housing production if it is going reduce its affordability problems…
CBC's Andrew Rein was joined by NYC Director of City Planning Dan Garodnick and NYCEDC President & CEO Andrew Kimball for a wide-ranging discussion on job and population trends, housing affordability, and economic development in a time of uncertainty. Dan Garodnick is Director of the New York City Department of…
New York's transit system requires significant capital investment to address a funding gap exceeding $30 billion, which is essential to maintaining the region's economic health and competitiveness. Addressing this shortfall requires a combination of increased state and city contributions, modest fee adjustments, labor savings, and a focus on system repairs to ensure long-term viability.
Recommendations related to Competitiveness
The State and MTA should focus capital investment exclusively on projects to repair and improve the system.
The State and MTA should increase the State contribution by $7 billion, primarily by shifting funds from lower impact programs, and increase the City contribution by $2 billion.
The State and MTA should modestly increase fares, tolls, and vehicle registration fees, dedicating them to support $6.8 billion in bonds.
The State and MTA should ensure labor provides the flexibility to implement $500 million in recurring operating savings to support the planned level of MTA borrowing.
The State and MTA should turn the tide on fare evasion.
Key Data
$30 billion
— The size of the funding gap for the MTA's capital investment needs.
$7 billion
— The recommended increase in the State contribution to the MTA.
$2 billion
— The recommended increase in the City contribution to the MTA.
$6.8 billion
— The amount in bonds to be supported by modest increases in fares, tolls, and vehicle registration fees.
$500 million
— The amount of recurring operating savings labor should provide to support MTA borrowing.
$16 billion
— The additional funding needed for the Capital Plan beyond the initial proposals.
This year, voters will choose the next New York City Comptroller, who will play a critical role holding the City Administration accountable, managing five pension funds with $280 billion in assets, and partnering in the issuance of billions of dollars of City debt. The Comptroller is important to New York City's fiscal…
New York's proposed state budget increases spending and taxes, which threatens the state's fiscal foundation and competitiveness by potentially driving residents and businesses away. The state should instead prioritize living within its means, maintaining essential services, and preserving reserves for future economic downturns rather than funding recurring expenses with one-time resources.
Recommendations related to Competitiveness
Lawmakers should avoid new tax increases to prevent risking people leaving, squeezing businesses, and harming New York’s competitiveness.
Lawmakers should hold the line on spending to ensure the state lives within its means and maintains fiscal stability.
Lawmakers should identify the most critical services and needs and keep money aside to fund a transition path to a new, lower level of federal aid.
Rainy Day reserves should be saved to weather recessions and time-limited emergencies, not depleted to temporarily plug recurring federal reductions.
Key Data
$18.2 billion
— The structural gap in the precarious State budget.
$4 billion
— The amount of recurring spending the Assembly and Senate propose to add on top of the Governor’s proposal.
13.7 percent
— The year-over-year adjusted State Operating Funds growth rate.
$11 billion
— The total increase in State Operating Funds spending in the Assembly plan.
$7 billion
— The amount allocated in the Assembly plan to pay off the State’s unemployment insurance trust liability.
$35 billion is how much of the MTA's 5-year capital plan remains unfunded. Investing in the MTA’s crumbling infrastructure is one of the most important decisions Albany will make this year; New York's economy, quality of life, and the region's competitiveness depend on it. At a recent CBC event, MTA…
New York State's executive budget threatens long-term economic competitiveness by ballooning spending and failing to address structural imbalances, such as the $18.5 billion deficit. Instead of utilizing revenue for one-time infrastructure investments or bolstering reserves, the budget extends temporary tax surcharges and spreads funds too thinly to provide lasting relief.
Recommendations related to Competitiveness
The State should restrain Medicaid spending, which is the primary driver of budget growth.
The State should eliminate 'hold harmless' provisions or redirect aid from wealthy districts that do not require it to fund a sound basic education.
The State should use tax rebate funds to pay cash for infrastructure projects like roads, bridges, or MTA improvements instead of borrowing.
The State should use the $3.7 billion from the MCO tax for one-time health system transformation investments rather than building it into the Medicaid spending base.
The State should deposit a portion of this year’s closeout surplus into the rainy day reserves to better prepare for future economic downturns.
Key Data
$18.5 billion
— The State's structural imbalance masked by projected budget gaps.
$252 billion
— The total size of the Executive Budget.
$100 billion
— The increase in State spending over the last ten years.
$11.0 billion
— Projected budget gaps by fiscal year 2029.
$2 billion
— State aid sent to wealthy districts that do not need it for a sound basic education.
$3.7 billion
— Revenue generated from the MCO tax.
New York State faces a $15.6 billion structural imbalance that threatens its long-term fiscal stability and economic competitiveness. To improve affordability and competitiveness, the state must prioritize recurring tax relief over one-time rebates and implement sustainable spending growth limits.
Recommendations related to Competitiveness
To improve the State’s competitiveness and affordability, recurring tax reductions are needed.
New Yorkers need significant, recurring tax relief and policies that will make the State more affordable.
The Executive Budget should include proposals to ensure the State’s nation-leading spending on school aid is better targeted, fiscally sustainable, and accompanied by oversight changes to drive improvement in student learning.
The Governor should propose a funding plan for the MTA that is sustainable—meaning it limits the need to raise taxes every five years—and is supported fairly by those across the region and among taxpayers, riders, and drivers.
Key Data
$15.6 billion
— The State's structural imbalance by fiscal year 2028.
$3 billion
— The amount of the Governor's proposed one-time tax relief rebate.
$33 billion
— The financing gap in the MTA's 2025-2029 capital program.
$2 billion
— The amount of state aid sent to wealthy school districts that already provide a sound basic education.
7.5 percent
— The projected annual growth rate of State Operating Funds spending for the current year.
New York State and its localities maintain the highest tax burden in the nation, collecting $12,751 per capita, while simultaneously ranking second in spending at $15,368 per capita. This high level of taxation and expenditure, which significantly exceeds national averages, highlights the state's outlier status compared to regional and national competitors.
Key Data
$15,368
— Total state and local expenditures per capita in New York, which is 45% higher than the national average.
$12,751
— Total state and local taxes collected per capita in New York, ranking as the highest of all states.
$169
— Total state and local taxes collected per $1,000 of personal income in New York, the highest in the nation.
$59
— Personal income tax collected per $1,000 of personal income in New York, exceeding all other states.
$19
— Corporate income tax revenue per $1,000 of state GDP in New York, higher than all other states.
$3,319
— Local property tax collections per capita in New York, which were 70% higher than the national average.
New York City's economic landscape shows a 2024 annual wage rate of $117,040 and non-farm employment reaching 4,742,000 jobs. These figures, alongside a 2023 median household income of $76,577, provide a snapshot of the city's fiscal and economic standing over the last five years.
Key Data
$117,040
— The annual wage rate in New York City for FY 2024.
4,742
— The number of non-farm employees in New York City in thousands for FY 2024.
$76,577
— The median household income in New York City for FY 2023.
$721 Billion
— The personal income in New York City for FY 2024.
New York State spends $11 billion annually on economic development programs, yet many tax incentives fail to generate sufficient returns or prove necessary for business investment. To improve economic competitiveness, the state should prioritize high-quality public services, sustainable spending, and reasonable taxes over ineffective, industry-specific tax breaks.
Recommendations related to Competitiveness
The State should study what works and what doesn’t and modify programs accordingly to improve the effectiveness of its economic development programs.
Lawmakers should ensure evaluators have access to necessary tax data by waiving strict tax secrecy provisions to properly evaluate incentives.
The State should avoid picking winners and losers because predicting which firms or sectors would only grow if incentives were offered is very difficult.
The State should use performance-based incentives that reward actual performance in key sectors rather than broad, as-of-right incentives.
To ensure continued success, the State should get the basics right by delivering high-quality public services, ensuring sustainable spending, keeping taxes at reasonable levels, and maintaining infrastructure.
The State should retool film tax credit programs to surgically target incentives to portions of the film industry that are truly at risk while reducing or eliminating ineffective incentives.
Key Data
$11 billion
— Annual cost of economic development programs in New York State and its localities.
30 cents
— Return in State tax revenue for every dollar of tax credits awarded in some cases.
$5.8 billion
— Total amount spent by New York State on film and commercial production tax credit programs since 2007.
18,000
— Number of film production jobs added in New York over the two decades that film tax credits have been available.
17.6 percent
— New York's share of national film production employment in 2022.
$878 million
— Foregone tax revenue cost of Georgia's film tax credit in fiscal year 2023.
New York’s competitiveness, finances and quality of life depend on a reliable transit system, which requires a tightly focused and smartly financed $69 billion capital plan. State leaders must address the $15 billion funding gap caused by the congestion pricing pause and the $1 billion structural budget gap to ensure the system remains functional and the economy thrives.
Recommendations related to Competitiveness
State leaders should support a tightly focused and smartly financed MTA capital plan.
The MTA should reduce fare evasion and increase efficiency to stabilize its operating budget and finance debt.
Albany also should trim and hyper-focus the plan.
One-third of the funding gap is congestion pricing; it should be unpaused.
The cost should be fairly spread among all beneficiaries — the region’s riders, taxpayers and drivers.
Key Data
$1.5 trillion
— Value of the MTA's assets that need to be brought to a state of good repair.
39%
— Portion of transit station ventilation systems in poor and marginal condition.
90%
— Portion of Penn Station’s electrical equipment, cables and wiring in poor and marginal condition.
$69 billion
— Proposed 5-year capital plan to improve the system’s state of good repair.
$15 billion
— Funding hole created by pausing congestion pricing.
New York's proposed cap-and-invest program risks harming the state's economic competitiveness by imposing significant new costs on residents and businesses without sufficient analysis of its fiscal impact. To avoid driving jobs and residents to other states, the state should recalibrate its 2030 emissions goals and provide a transparent plan for the billions in revenue the program is expected to generate.
Recommendations related to Competitiveness
The State should conduct and publicly release a more robust assessment of NYCI’s potential fiscal and economic impacts before or with the draft rules.
The State should recalibrate the 2030 emissions reduction goal to be ambitious but feasible so New York can leverage market-driven, cost-effective emissions reductions that are balanced with economic growth.
The State should present a detailed plan to use the program’s revenue which could exceed $30 billion over the next 5 years.
The State should permit banking of allowances from the start instead of after the first compliance period.
The State should allow limited use of rigorously verified offsets to improve the pre-proposal.
Key Data
$12 billion
— Potential annual cost of the new emissions charge by 2030.
$30 billion
— Potential revenue generated by the program over the next 5 years.
New York City's severe housing shortage is dampening the economy and costing the city $2 billion in annual tax revenue, while also driving negative outmigration that cost over $300 million in fiscal year 2022. To improve affordability and strengthen the city's economic competitiveness, the City Council should pass the City of Yes zoning amendment without scaling back its scope or exempting neighborhoods.
Recommendations related to Competitiveness
The City Council should pass the City of Yes as is, without exempting neighborhoods, attaching restrictions or mandates that make it financially untenable to build rental housing, or conditioning approval on new spending that would widen the City’s gaping $9 billion budget gap, to strengthen the city’s economy and competitiveness.
The Council should not scale back the scope of individual City of Yes provisions by imposing onerous affordability restrictions or wage mandates, which are necessary to bolster the tax base and strengthen the city’s economy.
The Council should not condition their approval of City of Yes on new spending or capital projects unrelated to the text amendment, as this threatens the housing production needed to strengthen the city’s economy and competitiveness.
The Council should oppose any proposals that would reduce zoning capacity or trade growth in one area of the city for stasis elsewhere, as this prevents the housing growth required to strengthen the city’s economy and competitiveness.
Key Data
$9.3 billion
— The estimated budget gap for the City for fiscal year 2026.
1.4 percent
— New York’s record low rental vacancy rate.
$2 billion
— The amount of annual tax revenue potentially lost due to the city's severe housing shortage.
$300 million
— The cost in income and sales tax revenue in fiscal year 2022 caused by negative outmigration.
1 in 3
— The proportion of city households living in homes that are significantly larger than they need for their household size.
$9 billion
— The City's gaping budget gap mentioned in the context of conditioning approval on new spending.
The MTA's proposed 2025-2029 capital plan is overly ambitious and requires a sustainable funding strategy that avoids new tax increases to protect the region's economic standing. To ensure long-term financial stability and reliable transit, the plan must be trimmed, congestion pricing should be unpaused, and operating budgets must be stabilized through reduced fare evasion and increased labor productivity.
Recommendations related to Competitiveness
The MTA should trim the plan to a more achievable level to reduce the funding gap.
The MTA should transparently schedule essential rebuild and improve projects before expansion projects.
The State should unpause congestion pricing.
The State should develop a funding plan that is sustainable—it should not require a new tax increase every five years.
The State should develop a funding plan that does not harm New York’s competitiveness.
The MTA must reduce fare evasion.
Labor must be a partner to increase productivity.
Key Data
$8.6 billion
— Proposed and previously planned expansion projects that divert resources from essential rebuilding and improvement efforts.
$10 billion
— Proposed in new MTA bonds that are not currently affordable.
$1 billion
— The MTA’s structural budget gap that will be exceeded by the end of the decade.
15 percent
— The portion of an operating budget that is not fully funded, making debt unaffordable.
The Industrial and Commercial Abatement Program has grown six-fold in cost to over $500 million annually, yet evidence suggests the vast majority of projects receiving these tax breaks do not require them to be financially feasible. A one-year extension should be signed instead of the proposed four-year renewal to allow for a thorough, objective evaluation of the program's cost-effectiveness and necessity.
Recommendations related to Competitiveness
The Governor should veto S9822/A10530 because it extends the Industrial and Commercial Abatement Program without assessing its necessity for economic growth.
The Governor should sign a one-year extension as a Chapter amendment to allow time to objectively evaluate the program's cost-effectiveness.
Policymakers should identify eligibility and benefit changes to improve the cost-effectiveness of the Industrial and Commercial Abatement Program.
The state should implement stricter geographic boundaries for tax incentive programs to ensure they are targeted where needed.
The state should impose greater restrictions on benefits for retail space to prevent unnecessary tax breaks.
The state should mandate shorter benefit durations for tax incentive programs, as current 25-year abatements are often longer than necessary.
Key Data
3.6%
— The percentage of projects receiving ICAP benefits that actually required the tax breaks to be financially feasible.
$81.4 million
— The cost of the ICAP program in fiscal year 2017.
$506.3 million
— The cost of the ICAP program in fiscal year 2024.
Two-thirds
— The portion of ICAP recipients that receive 25-year abatements.
$500 million
— The amount spent per year on the program without a determination of its effectiveness.
New York City's housing shortage, characterized by a record-low 1.4 percent rental vacancy rate, significantly hampers economic growth and competitiveness by driving away residents and reducing tax revenue. To address this, the city must double housing production and implement citywide zoning reforms that increase development capacity to bolster the tax base and improve affordability.
Recommendations related to Competitiveness
The City Planning Commission and the City Council must hold the line against opposition to the City of Yes for Housing Opportunity to ensure meaningful progress in increasing housing capacity.
The final zoning text must result in a meaningful increase in development capacity citywide to improve affordability and quality of life.
Public officials should oppose any proposals that would reduce zoning capacity or trade growth in one area of the city for stasis elsewhere.
Housing production in New York City needs to double to meaningfully improve affordability.
The city must build more housing of every type in every neighborhood to bolster the tax base and strengthen the city’s economy and competitiveness.
Key Data
1.4 percent
— New York’s rental vacancy rate is at this record low, the product of sluggish production and pro-stability housing laws.
$300 million
— Persistently negative outmigration, caused in part by housing affordability and availability, cost the City this amount in income and sales tax revenue in fiscal year 2022.
$2 billion
— The housing shortage is so severe that it dampens the City’s economy, potentially costing the City this amount in annual tax revenue.
New York City's persistent housing underproduction has created a severe shortage that limits mobility, drives up costs, and harms the city's economic competitiveness by depressing tax revenue and discouraging growth. To address this, the city must implement broad-based zoning reforms and state-level policy changes to increase housing supply and restore the city's fiscal and economic health.
Recommendations related to Competitiveness
Boosting supply will require both State legislative action and local zoning changes, such as those in the Adams Administration’s City of Yes for Housing Opportunity proposal, that increase the capacity for development throughout the city.
By modernizing the City’s zoning ordinance to allow more housing everywhere, the City can start to chip away at a housing shortage that has been years in the making.
Much more will need to be done at the State level to increase production at the scale needed to improve affordability, including reforming the State’s environmental review laws; passing laws to encourage development in the downstate suburbs; repealing the Scaffold law, which drives up insurance costs; modernizing building codes; and reforming the City’s property tax policy.
Key Data
$300 million
— Conservative estimate of the cost to the City in personal income and sales tax revenue due to net outmigration in 2022.
$1.4 billion to $1.9 billion
— Potential annual boost to City tax revenue if enough housing is built to close the supply gap.
2 percent
— Potential annual reduction in national gross domestic product caused by housing underproduction in prosperous regions.
$433 billion
— The amount of economic output lost in 2022 due to a 2 percent reduction in national GDP caused by housing underproduction.
$1.1 trillion
— New York City’s gross city product (GCP) in 2022.
Raising the Payroll Mobility Tax by $1 billion annually to replace congestion pricing would negatively impact the state's economic standing, especially following the $1.1 billion tax increase enacted last year for the MTA operating budget. Implementing congestion pricing remains the superior strategy for funding transit infrastructure while protecting the state's long-term economic health.
Recommendations related to Competitiveness
The State should not now raise the Payroll Mobility Tax $1 billion annually to replace congestion pricing, as doing so would hamper New York’s competitiveness.
The State should stay the course and implement congestion pricing rather than pursuing alternative tax increases that threaten the state's economic health.
There needs to be a thoughtful, information-based discussion of the MTA’s needs for state of good repair investment to determine how to appropriately and fairly finance those needs.
Key Data
$1 billion
— The amount the State should not raise the Payroll Mobility Tax annually to replace congestion pricing.
$1.1 billion
— The amount by which business taxes were raised last year to fund the MTA operating budget.
The New York State budget includes $237 billion in spending and leaves a structural deficit likely exceeding $16 billion, while avoiding tax increases that would harm the state's competitiveness. Efforts to improve housing production and maintain fiscal reserves are noted, though the lack of transparency regarding financial plan tables remains a significant concern.
Recommendations related to Competitiveness
Maintain the policy of no tax increases on New Yorkers to avoid harming the State's competitiveness.
Ensure the package of housing agreements cost-effectively boosts production of all types in all areas to improve affordability and the State's competitiveness.
Deposit all reserves into the Rainy Day Reserve to protect them from potential squandering.
Use short-term funds to restructure the Medicaid system to be more sustainable rather than supporting recurring spending.
State leaders must produce basic financial plan tables immediately to provide transparency.
Key Data
$16 billion
— The likely structural budget deficit left by the state budget.
$237 billion
— The total amount of spending approved in the state budget.
$4 billion
— The addition to the State's pension liabilities resulting from Tier 6 retirement-plan sweeteners.
$377 million
— The unnecessary costs imposed on state and local government budgets next year due to Tier 6 sweeteners.
New York's state budget negotiations must prioritize fiscal stability by avoiding tax increases that undermine the state's economic competitiveness and by incentivizing housing production to address affordability. The state should also reject expensive retirement plan enhancements and avoid relying on uncertain federal funding to cover ongoing costs.
Recommendations related to Competitiveness
The state should reject tax increases, as New York and its localities already collect more taxes per person than any other state, and adding to that hurts the state’s competitiveness.
Policymakers should boost housing production, as the housing-supply and affordability crisis continues to hurt New York’s value proposition as a great place to live, start a family, and run a business.
The state should reject proposed Tier 6 retirement-plan enhancements, as these sweeteners are expensive and unnecessary, and Tier 6 is already more generous than most private-sector plans.
The state should shrink the structural gap and strengthen long-term stability to ensure the State continues to have the capacity to improve New Yorkers’ lives.
The state should not include speculative, short-term federal money derived from a Medicaid/MCO tax to pay for ongoing costs, as uncertain money should not be budgeted.
Key Data
$16+ billion
— The structural budget gap that the state must reduce by restraining spending growth.
32 percent
— The growth in adjusted State Operating Funds from FY 2020-FY2025.
$33.8 billion
— The dollar amount of growth in adjusted State Operating Funds from FY 2020-FY2025.
New York faces significant fiscal challenges, including out-year budget gaps approaching $10 billion and a structural gap exceeding $16 billion, which threaten the state's competitive position. To maintain stability and its value proposition for residents and businesses, the state must limit annual spending growth to 2 percent, hold the line on taxes, and prioritize housing production.
Recommendations related to Competitiveness
The Legislature would be wise to identify their top priorities and identify spending reductions to offset the added spending, as tax increases would weaken New York’s already precarious competitive position.
Spending growth should be limited to no more than 2 percent annually to close those gaps and get to structural balance by fiscal year 2028, which is critical to New York’s fiscal stability.
Tempering spending growth, holding the line on taxes, and boosting housing production are critical to New York’s fiscal stability and our value proposition as a great place to live, run a business, and raise a family.
Extra scrutiny should be given to the State’s two biggest expenses—school aid and Medicaid—to ensure fiscal stability.
The State must ensure that the incentives and any housing-related actions are well designed to ensure development is fiscally feasible and that the policies promote the production of all types of housing for all income levels in all places.
Key Data
$8 billion
— Amount added to State Operating Funds spending on top of the Governor’s proposal.
8.9 percent
— Year-over-year growth in State Operating Funds spending.
7.9 percent
— Successive years of spending growth.
$10 billion
— Out-year budget gaps faced by the State.
$16 billion
— Structural budget gap topping this amount.
2 percent
— Annual limit for spending growth to close gaps and reach structural balance.
New York State faces a significant structural budget imbalance, with projected spending growth threatening long-term fiscal stability and economic competitiveness. To address this, the state must restrain spending growth to 1.5 percent annually and avoid further tax increases that could exacerbate the fiscal pressure.
Recommendations related to Competitiveness
The State’s fiscal stability rests on restraining spending more, rather than inflaming the problem by additional unsustainable spending.
The enacted budget should restrain spending to put the State on a path to budget balance.
Forward-looking budget choices this year—namely not layering on further tax and spending increases—would relieve the building budget pressure and stave off a potentially harsh fiscal reckoning.
To close the State’s structural imbalance, SOF spending growth would need to be kept to 1.5 percent annually over the life of the financial plan.
Key Data
$9.9 billion
— The State currently projects a budget gap in fiscal year 2028.
$16.4 billion
— The structural imbalance of the budget when accounting for non-recurring resources.
$26 billion
— The amount SOF spending grew from fiscal year 2021 to fiscal year 2024.
7.9 percent
— The average annual growth rate of SOF spending from fiscal year 2021 to fiscal year 2024.
4.1 percent
— The average annual SOF spending growth rate between fiscal years 2024 and 2028.
$51 billion
— The projected growth in SOF spending over the 8 years between fiscal years 2021 and 2028.
151,700 is the net loss of New York personal income tax filers in 2020 and 2021. Was this primarily due to the pandemic? CBC is relaunching its podcast with a focus on policy discussions, starting with the podcast's founder and CBC alum Maria Doulis, Deputy New York State Comptroller for…
New York faces a looming fiscal reckoning driven by years of unsustainable spending growth and structural budget gaps that threaten the state's ability to attract and retain residents and businesses. To maintain competitiveness and avoid further outmigration, the government must prioritize spending restraint, align recurring expenditures with revenues, and improve operational efficiency rather than increasing taxes or depleting reserves.
Recommendations related to Competitiveness
Leaders should ignore calls to increase taxes and deplete reserves, as New York is already the nation’s highest-tax state and a leader in domestic outmigration, meaning now is not the time to take actions that give people fresh reasons to leave.
Both the City and State must align recurring expenditures for all programs with revenues to ensure long-term fiscal stability.
Smart spending restraint should focus on prioritizing the programs that produce the most significant effects and shrinking or eliminating those that are ineffective.
The State needs to reduce Medicaid spending growth while ensuring access to needed high-quality care and a strengthened safety net.
School aid needs to focus on better targeting aid to high-need districts, rather than increasing aid to wealthy districts that already self-fund a sound basic education.
Key Data
$233 billion
— The State’s total budget for fiscal year 2025.
$33 billion
— The increase in State Operating Funds spending between fiscal years 2020 and 2025.
$15 billion
— The structural gap when accounting for non-recurring revenue.
$11.5 billion
— The increase in City-funded spending between FY 2020 and FY 2025.
$3.6 billion
— The additional fiscal year 2025 expenses to serve migrants.
40%
— The growth in Medicaid spending over the last three years.
New York's looming fiscal instability, characterized by a $17 billion structural budget gap, poses a significant threat to the state's economic competitiveness. To mitigate this risk, the state must exercise spending restraint and avoid raising its already nation-leading personal income and business tax rates.
Recommendations related to Competitiveness
Spending restraint is needed to put New York on a path to fiscal stability and protect its competitiveness.
New York’s combined top personal income and business tax rates, which are already the nation’s highest, should not be raised to avoid sharpening the threat to competitiveness.
Key Data
$17 billion
— The structural budget gap that masks the state's fiscal instability and threatens its competitiveness.
New York City faces a precarious fiscal future with budget gaps reaching up to $10.6 billion, yet raising taxes would further weaken the city's competitiveness and recovery following a 5.3% population decline between 2020 and 2022. Instead of increasing revenue, the city must prioritize essential services, improve operational efficiency, and negotiate labor reforms to address unsustainable spending levels.
Recommendations related to Competitiveness
New York City leaders should avoid raising taxes, as further increases would weaken the city's competitiveness and undermine its recovery.
The city should prioritize key services, relentlessly manage them to get results, and operate effectively and efficiently to grow financially stronger.
The city must engage labor to identify and deliver services efficiently by agreeing to changes in work rules, job titles, health insurance, and other benefit structures.
City reserves should be protected for future recessions rather than used to avoid solving problems caused by unaffordable spending.
The city should focus on maximizing efficiency and minimizing the impact on New Yorkers to navigate the current fiscal reckoning.
Key Data
5.3%
— The decline in New York City's population from 2020 to 2022.
$7.1 billion
— The budget gap for fiscal year 2025 shown in the city's financial plan.
$10.6 billion
— The potential budget gap when including fiscal cliffs and areas the city regularly underbudgets.
$5.8 billion
— The comptroller's estimate for the fiscal year 2025 budget gap.
$12.2 billion
— The comptroller's estimate for the fiscal year 2027 budget gap.
20%
— The portion of savings in the most recent Program to Eliminate the Gap that will touch current services.
New York City faces a precarious fiscal situation with a projected $10.6 billion budget gap, necessitating strategic prioritization of services rather than tax increases that would undermine the city's economic competitiveness. To ensure long-term stability, the city must avoid depleting reserves and instead pursue efficiency improvements and labor reforms to manage costs effectively.
Recommendations related to Competitiveness
The City should prioritize key services, relentlessly manage them to get results, and operate effectively and efficiently to maintain its competitiveness.
The City should avoid raising taxes, as doing so would weaken New York City’s competitiveness.
The City should refrain from dipping into reserves, as this would weaken the City’s ability to withstand any future recession.
The City must engage labor in the solution by negotiating agreed-upon changes to work rules, job titles, health insurance, and other benefit administration structures.
The Administration and City Council should focus on identifying the most critical priorities and services and delivering them well.
Key Data
$16 billion
— Added costs through 2027 resulting from recent collective bargaining agreements that did not include offsetting productivity increases.
$7.1 billion
— The initial budget gap projected for fiscal year 2025.
$10.6 billion
— The more accurate budget gap for fiscal year 2025 when accounting for fiscal cliffs and regularly underbudgeted areas.
92 percent
— The portion of previous savings programs that did not directly affect program services, instead relying on re-estimating costs and eliminating vacancies.
20 percent
— The portion of the most recent savings program that will affect current programs.
New York's proposed Cap-and-Invest program must be carefully designed to balance ambitious climate goals with the need to maintain economic competitiveness and avoid unintended adverse impacts like emissions leakage. By utilizing market-based mechanisms, broad sectoral coverage, and transparent revenue management, the state can achieve emissions reductions while minimizing the financial burden on businesses and households.
Recommendations related to Competitiveness
The State should allow and pursue linkage with other cap-and-invest programs to enhance cost-effectiveness by providing a larger pool of emissions reduction opportunities.
The State should keep sectoral coverage as broad as possible to spread the cost of emissions reduction and minimize the financial burden on any single sector.
The State should maintain flexibility in compliance through trading, banking, and verifiable offsets to ensure the program behaves as a true market and accommodates businesses' varying circumstances.
The State should allocate revenue on-budget, segregating it for uses that promote cost-effective emissions reduction to ensure transparency and accountability.
The State should regularly monitor, publicly report, and evaluate program data to inform necessary programmatic modifications and facilitate public scrutiny.
Key Data
$38,934 Million
— Cumulative auction revenue generated by California's cap-and-invest system since it began operating in 2013.
$2.1 Billion
— New York's share of cumulative revenue from the Regional Greenhouse Gas Initiative (RGGI).
3 percent
— Estimated increase in the price of allowances in the market if facility-specific caps are implemented to mitigate inter-facility leakage.
43 percent to 86 percent
— Estimated range of emissions reduction benefits within the RGGI region that were offset by increased emissions in neighboring states.
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New York faces significant structural budget gaps, with projected shortfalls reaching $22 billion as spending growth outpaces revenue. To maintain economic stability and competitiveness, the state must restrain spending growth in major programs like Medicaid and education rather than relying on tax increases or reserve depletion.
Recommendations related to Competitiveness
Another round of tax increases or drawing down reserves should not be part of the package, as both would likely damage New York’s long-term stability and economic competitiveness.
The state should avoid extending temporary taxes, as doing so would make the state even less economically competitive.
To close budget gaps without damaging economic competitiveness, the state should restrain spending growth, necessarily starting with its largest programs.
The state should curtail — not expand — economic development programs with dubious impacts to avoid further fiscal strain.
State school aid should be better targeted to districts with higher-need students, instead of funneling billions of dollars to wealthy districts with strong local funding.
Key Data
$9 billion
— Next year’s projected budget gap.
$13 billion
— Projected budget gap following next year.
$22 billion
— Structural budget hole once temporary funds are cleared.
9.0%
— Annual rate of state spending growth over the past three years.
5.2%
— Budgeted annual increase in state spending going forward.
$1.5 billion
— Budgeted costs for migrants over two years.
Expanding film tax credits through legislation like S7562/A7757 creates a detrimental 'race to the bottom' in interstate economic development competition that depletes state resources. Instead of relying on costly incentives, New York should prioritize economic growth by leveraging its comparative strengths and improving the overall business climate.
Recommendations related to Competitiveness
The Governor should veto S7562/A7757, which expands eligibility for the Empire State Film Production Credit.
New York should focus on expanding its economy based on its comparative strengths, such as human capital and cultural and natural amenities.
The state should prioritize enhancing its willingness to make it easier to do business in New York rather than engaging in interstate competition for the richest incentives.
New York's fiscal year 2024 budget weakens the state's financial footing by increasing long-term structural deficits to over $15 billion and extending temporary tax surcharges. These high tax burdens, combined with missed opportunities for housing and transit reforms, threaten the state's economic competitiveness and stability.
Recommendations related to Competitiveness
State leaders should enact proven, flexible strategies, like those proposed by the Governor, to streamline environmental review, eliminate the floor area ratio cap, promote transit-oriented development, legalize accessory dwelling units and basement apartments, and extend and enact a successor to 421-a.
The Governor and Legislature should strongly support identifying and implementing productivity improvements during this round of collective bargaining between the MTA and its unions.
The State should prioritize additional deposits to the Rainy Day Fund to protect against economic downturns.
Key Data
$15 billion
— The long-term structural deficit increased to well over $15 billion.
$5 billion
— The budget gap is widening substantially beyond the $5 billion projected in the Executive Budget.
$2.9 billion
— Up to $2.9 billion in efficiency improvements are possible for the MTA.
$1 billion
— The budget includes $1 billion to assist New York City in addressing the costs of asylum seekers.
New York State's budget proposals threaten long-term fiscal stability by significantly increasing spending and relying on temporary tax hikes, which exacerbate the state's uncompetitive tax environment and drive outmigration. To mitigate these risks, the state should implement strict spending restraint, allow temporary tax increases to expire, and adopt comprehensive fiscal management reforms.
Recommendations related to Competitiveness
Restrain SOF spending growth to 2 percent annually to bring spending trends in line with receipts and close forecast gaps.
Allow temporary tax increases to sunset as scheduled or earlier to improve New York's competitiveness and reduce the costs of living and doing business.
Maintain or expand the Governor’s Rainy Day reserves plan to substantially increase the State's principal reserves.
Publish basic financial plan tables with the enacted budget so New Yorkers can understand the fiscal impacts of their leaders' choices.
Reform the State’s budgeting and fiscal management to improve services, stability, and accountability.
Key Data
$15 billion
— The projected structural deficit under the Governor's plan by fiscal year 2027.
$20 billion
— The projected structural deficit under the Legislature's plan by fiscal year 2027.
$23.8 billion
— The growth in State Operating Funds (SOF) from fiscal year 2020 to fiscal year 2023.
12.2%
— The increase in adjusted SOF spending between fiscal years 2022 and 2023.
$28.2 billion
— The amount the Executive Budget proposal would exceed the pre-acceleration spending trend by fiscal year 2027.
$32.1 billion
— The amount the Legislative proposal would exceed the pre-acceleration spending trend by fiscal year 2027.
New York spends approximately $10 billion annually on economic development programs that often lack rigorous evidence of effectiveness, such as film tax credits and horse racing subsidies. Instead of relying on these unproven incentives, the state should prioritize investments in human capital, infrastructure, and essential public services to effectively compete for businesses and residents.
Recommendations related to Competitiveness
New York should focus on developing human capital—both educating and training New Yorkers and attracting great talent, providing high-quality, essential public services, and maintaining its infrastructure so that goods and people can move easily and safely.
The state should conduct thorough, rigorous evaluations to identify whether a given incentive program has induced additional economic activity and compare that benefit to the cost and opportunity cost.
New York should ensure the state is an affordable, attractive, and fiscally stable place to live and operate a business to help grow jobs and increase the quality and vitality of all New Yorkers’ lives.
Key Data
$10 billion
— Annual economic development spending by New York state and its localities.
$14.6 billion
— Possible lifetime cost of the film tax credit under the executive budget proposal.
$44 million
— Annual cost of four city tax incentives that the state Legislature proposes to extend.
$455 million
— Proposed funding to renovate and expand Belmont Park for the horse racing industry.
$6.5 billion
— Total credits already granted for the Empire State Film Tax Credit without rigorous analysis.
$420 million to $700 million
— Proposed increase in the annual credit cap for the Empire State Film Tax Credit.
New York State's legislative budget proposals threaten the state's economic standing by adding nearly $5 billion in recurring spending and approximately $2 billion in new annual taxes. To maintain an attractive environment for residents and businesses, the final budget must prioritize the quality of core services and establish a path toward reasonably competitive tax rates.
Recommendations related to Competitiveness
The State should craft a final budget that ensures New York continues to be an attractive place to live and work by paving the path to reasonably competitive taxes.
The State should focus on the quality of core services to ensure New York remains an attractive place to live and work.
The State should avoid adding approximately $2 billion in additional annual taxes on personal income and business taxes.
The State should avoid adding nearly $5 billion in new spending, most of which is likely to be recurring.
The State should provide essential basic financial plan tables to allow the public to better understand the budget's size and impact on future budget gaps.
Key Data
$2 billion
— Additional annual taxes on personal income and business taxes proposed in the legislative budget.
$1 billion
— Business tax surcharge extension proposed by the Governor.
$5 billion
— New spending added in the legislative budget proposals, most of which is likely to be recurring.
New York's economic competitiveness is currently threatened by unsustainable spending growth and high taxes, which risk the state's long-term fiscal health. To improve its value proposition and attract residents and businesses, the state must restrain spending, reject tax increases, and implement rigorous performance management systems.
Recommendations related to Competitiveness
Restrain annual SOF spending growth to 2 percent to structurally balance the budget by fiscal year 2028 to stave off massive future cuts.
Reject the corporate tax surcharge extension and future dependence on the personal income tax surcharge to improve tax competitiveness.
Accelerate Rainy Day Fund deposits and further improve the Fund’s structure to protect New Yorkers from future emergencies and downturns.
Publish basic financial plan tables with the Legislative one-house budgets and the Enacted Budget when voted on to ensure basic fiscal transparency.
Reject the proposal to shift Medicaid costs onto local governments, and empower a Health System Reform task force to put Medicaid on a fiscally sustainable path.
Target all school aid based on need, reduce aid to wealthy districts that fund a sound basic education with local resources, and eliminate hold harmless provisions to better align spending with actual needs.
Shrink rather than expand the film tax credit, reject State borrowing for Belmont Park, and reject extension of New York City economic development incentives absent rigorous evaluation of their effectiveness.
Boost statewide housing production by supporting the Governor’s housing plan, including the New York State Housing Compact and transit-oriented development, to accelerate production.
Ensure at least one-half of any plan to stabilize the MTA’s operating budget comes from labor productivity, with the remaining from the State budget, and appropriately apportioned regional support to ensure fiscal stability.
Prioritize cost-effective investments in the energy transition and resiliency to maximize the impact of climate and energy interventions.
Key Data
$14.4 billion
— The projected structural budget imbalance in fiscal year 2028.
$220 billion
— The total amount of State spending that requires a comprehensive performance measurement system to ensure real results.
$3.1 billion
— The amount of State aid that will go to 164 districts that self-fund a sound basic education before receiving any State aid.
$85 billion
— The projected total school spending in school year 2024, excluding extraordinary COVID-19 aids.
$68 billion
— The estimated Statewide sound basic education need.
$455 million
— The amount of new State debt proposed to finance the renovation and expansion of the State-owned Belmont Park.
The proposed expansion of the New York State Film Tax Credit would increase the lifetime maximum cost by 55 percent, from $9.4 billion to $14.6 billion, without rigorous evidence that such incentives are necessary to attract productions. Instead of engaging in a self-defeating race to the bottom with other states, New York should reject the expansion and phase out the credit until its need and cost-effectiveness are proven.
Recommendations related to Competitiveness
The State should reject the proposed expansion of the film tax credit because there is no rigorous evidence that it is economically beneficial.
The State should be shrinking the program until a rigorous analysis justifies some form of incentive.
The Empire State Film Tax Credit should not be extended and expanded; absent a rigorous evaluation that demonstrates its need and cost-effectiveness, it should be phased out.
Tax incentives should only be provided if they are justified by rigorous analysis.
Key Data
$9.4 billion to $14.6 billion
— The proposed expansion would increase the lifetime maximum cost of the film tax credit program.
$420 million to $700 million
— The proposed expansion would increase the annual credit cap starting in 2024.
55 percent
— The total maximum cost of the program would increase by this amount under the proposed expansion.
25 percent
— New York's current base rate for the film tax credit.
Commercial-to-residential conversions can enhance New York's long-term competitiveness and protect its property tax base, as demonstrated by the historical 421-g program which successfully converted 13 million square feet of commercial space into 12,865 residential units. To maximize future conversions, policymakers should implement regulatory relief—such as extending building age eligibility to unlock 120 million square feet of office space—and ensure any tax incentives are cost-effective and well-targeted.
Recommendations related to Competitiveness
The City should implement several other zoning changes to allow more commercial buildings to convert to residential use as-of-right.
For projects that require subsidy or tax breaks, policymakers should take steps to ensure that those incentives are well-targeted and cost-effective.
Any conversion program should be based on a detailed financial feasibility analysis that looks at the types of conversions that would be feasible without subsidy, and which would require subsidies.
If vacancies are concentrated in certain neighborhoods, the policy response—including any incentive—should be place-based, like the 1990s lower Manhattan plan.
If vacancies are concentrated in specific types of buildings (such as age, size, or class), the policy response should specifically target those types of buildings.
However, if vacancies are widely dispersed, the policy should be broad-based.
Key Data
13 million
— Square feet of commercial space converted into residential units under the 421-g program.
12,865
— Residential units created from the conversion of commercial space under the 421-g program.
120 million
— Square feet of office space built at densities greater than 12 FAR that could be converted in their entirety to residential use by extending the building age eligibility from 1969 to 1991.
12
— The Floor Area Ratio (FAR) limit to which buildings would be permitted to convert to residential units without relief from the Multiple Dwelling Law's cap.
1945
— The year before which most converted buildings under the 421-g program were built.
1991
— The building age threshold proposed to extend eligibility for relief from the Multiple Dwelling Law's FAR cap.
New York faces significant fiscal risks and a structural budget gap exceeding $12 billion, threatening the state's long-term competitiveness for residents and businesses. To maintain attractiveness, the state must prioritize efficient service delivery, restrain spending growth, and implement policies that support housing production and transit stability without relying on counter-productive taxes.
Recommendations related to Competitiveness
New York State leaders must focus on delivering quality services efficiently at a reasonable cost, supported by taxes that do not encourage people and business to leave the state.
At least half of any MTA stabilization plan should come from productivity improvements that reduce spending, which will require changes agreed to with labor.
The MTA should follow through on planned fare increases to help stabilize finances.
The enacted budget should include a well-crafted successor to 421-a, which is critical for New York City’s production of affordable rental housing.
The State should close its budget gaps and stabilize its finances by restraining spending growth to be in line with its recurring revenue.
Key Data
$12 billion
— The amount by which the structural budget gap exceeds annually.
7.1 percent
— The average annual increase in State Operating Funds spending over the past three years.
12.8 percent
— The growth in State Operating Funds spending during the current year.
$5.7 billion
— The projected budget gap for fiscal year 2025.
$9.0 billion
— The projected budget gap for fiscal year 2026.
$7.5 billion
— The projected budget gap for fiscal year 2027.
New York's ambitious climate goals to reduce greenhouse gas emissions by 40 percent by 2030 and 85 percent by 2050 require careful evaluation of the economic impacts of proposed mitigation strategies. Policymakers must prioritize cost-effective measures that minimize negative effects on the state's economic competitiveness and business operating burdens.
Recommendations related to Competitiveness
Legislators and regulators should calculate the cost-effectiveness of each strategy to ensure informed decision-making.
The state must identify, publicize, and consider the impacts of various strategies on state economic competitiveness, specifically regarding the additional costs and regulatory burdens of operating a business in New York.
Policymakers should prioritize strategies that generate the greatest emissions reduction at the lowest cost to New Yorkers.
The state should identify, publicize, and consider the impacts of various strategies on residential and business utility rates, disaggregated by economic circumstance, sector, and geography.
The state should identify, publicize, and consider the impacts of various strategies on the State’s operating and capital budgets.
Key Data
40 percent
— The goal for reducing greenhouse gas emissions by 2030 from 1990 levels.
85 percent
— The goal for reducing greenhouse gas emissions by 2050 from 1990 levels.
New York faces significant threats to its competitiveness, requiring state leaders to prioritize policies that maintain the state's appeal to individuals and businesses. To support this goal, the state should restrain spending to ensure the 2021 personal income tax increase expires as scheduled.
Recommendations related to Competitiveness
New York’s competitiveness will be well served by restraining spending to ensure that the 2021 personal income tax increase sunsets on schedule.
The state's multi-pronged cap-and-invest proposal will need further examination to ensure all of its components support a cost-effective energy transition.
Proposed property tax reforms in New York City fail to address the high tax burdens on commercial and rental properties, which face median effective tax rates of $1.72 and $1.53 per $100 of market value, respectively. Maintaining these high relative tax burdens puts the city's commercial real estate market at a competitive disadvantage and discourages the development of much-needed rental housing.
Recommendations related to Competitiveness
The City should address the high tax burdens for rental and commercial property in New York City, which is critical to supporting rental housing production and the competitiveness of the City’s commercial real estate market.
The City should narrow the disparities in tax burdens among property classes because high tax burdens on commercial property can put the City at a competitive disadvantage as well as impose high costs on businesses.
The City should analyze the extent to which there may be intra-class inequities resulting from the Department of Finance's valuation methods for commercial and rental buildings to ensure the system does not harm the competitiveness of the City's commercial real estate market.
Key Data
$1.72
— The median effective tax rate for office buildings per $100 in market value, which faces higher tax burdens that can put the City at a competitive disadvantage.
twice
— The factor by which office buildings would pay the effective tax rate of one- to three-family homes under the proposed property tax system, maintaining high relative burdens.
$1.53
— The median effective tax rate for large rentals per $100 in market value, compared to $0.83 for one- to three-family homes, which disincentivizes rental housing development.
1.8 times
— The multiple of the effective tax rate of one- to three-family homes that large rental buildings would continue to face under the proposed property tax system.
$0.83
— The median effective tax rate for one- to three-family homes per $100 in market value, which is significantly lower than the rates for large rentals and office buildings.
New York City's Local Law 97 mandates significant greenhouse gas reductions for large buildings, but current regulatory uncertainty threatens to drive up costs and undermine the city's economic competitiveness. To mitigate these risks, the city should implement flexible compliance pathways, such as carbon trading and expanded renewable energy credit options, to ensure building owners can meet targets without facing prohibitive financial burdens.
Recommendations related to Competitiveness
Specify, expand, and continue emission limit adjustments for density and specific uses to alleviate counterproductive disincentives to density and certain economically vital uses.
Set an accelerated, public timeline for rulemaking that includes critical rules governing limit adjustments and penalty mitigation so building owners can determine their eligibility and adjusted requirements as-of-right, which will encourage building owners to begin planning for compliance in good faith.
Provide buildings with flexibility to meet emissions goals while the New York City electric grid remains fossil fuel-powered by allowing buildings to purchase unlimited amounts of RECs associated with downstate offshore wind projects and limited amounts of RECs from existing generation to provide buildings with flexibility to meet emissions goals.
Allow owners of multiple buildings to target the most cost-effective emissions reductions across their assets by establishing a carbon trading scheme that allows credits to be traded within a portfolio to ensure cost-effective emissions reductions.
Key Data
25,000 square feet
— The size threshold for buildings subject to Local Law 97 greenhouse gas emissions reduction goals.
40 percent
— The greenhouse gas emissions reduction goal for buildings larger than 25,000 square feet by 2030.
80 percent
— The greenhouse gas emissions reduction goal for buildings larger than 25,000 square feet by 2050.
2005
— The baseline year for measuring greenhouse gas emissions reduction goals.
2024
— The year by which buildings must be in compliance with initial emissions limits.
New York's ambitious climate goals, including the Climate Leadership and Community Protection Act and Local Law 97, must be implemented using cost-effective strategies to avoid negative impacts on jobs and economic competitiveness. Policymakers should prioritize clear, data-driven regulations that incentivize investment in emissions reductions rather than imposing penalties that could hinder the ability of local industries to compete with neighboring states.
Recommendations related to Competitiveness
Calculate and identify the cost-effectiveness of each mitigation strategy to ensure that implementation costs do not unnecessarily hinder economic prioritization.
Disaggregate the financial impacts of each strategy on businesses and households to minimize negative economic impacts on jobs.
Identify the distribution of benefits and costs across stakeholder groups, industries, and geography, as changing costs exclusive to New York State may reduce industries’ ability to compete with bordering states.
Specify, expand, and continue emission limit adjustments for density and specific uses to alleviate counterproductive disincentives to density and certain economically vital uses.
Adjust limits and penalties appropriately to the post-pandemic economy to account for permanent shifts in work patterns, delays in retrofit projects, or financial strain.
Key Data
40 percent
— Statewide greenhouse gas reduction goal by 2030 under the Climate Leadership and Community Protection Act.
85 percent
— Statewide greenhouse gas reduction goal by 2050 under the Climate Leadership and Community Protection Act.
40 percent
— Local Law 97 greenhouse gas reduction goal for large buildings by 2030.
80 percent
— Local Law 97 greenhouse gas reduction goal for large buildings by 2050.
The Penn Station Area Civic and Land Use Improvement Project aims to boost New York's competitiveness through station renovation and increased density, though its financing and governance require careful oversight. To ensure the project delivers maximum value, officials must strictly control the scope of renovations, base tax abatements on economic growth, and avoid setting precedents for future rezonings.
Recommendations related to Competitiveness
The scope of Penn Station renovation should be tightly controlled and focused on efficient and safe passenger flow.
Abatements should be based primarily on promoting economic growth.
This plan should not set a precedent for future rezonings or financings.
The City generally should lead rezonings, both within the central business district and for station area plans, to ensure coordinated development.
The State should continue to encourage denser development around station areas to support regional economic growth.
Key Data
10-year
— The duration of the property tax lookback period used to calculate make-whole payments for the project.
3%
— The annual escalation rate applied to make-whole payments for the project.
New York City requires 560,000 new housing units by 2030 to accommodate population growth and address existing shortages, yet current development lags significantly behind other major cities. To improve affordability and economic viability, the city must implement a comprehensive housing plan that includes broad upzoning, streamlined approval processes, and property tax reform to incentivize development.
Recommendations related to Competitiveness
The city should implement a comprehensive housing plan that sets ambitious production goals, identifies necessary policy actions, and commits to publicly tracking both the process and results.
Basic operations must improve by speeding up approval times for zoning certifications, building permits, and certificates of occupancy.
The city needs to zone for growth by increasing as-of-right development capacity across the city.
Broader upzoning to increase allowable building sizes is necessary to provide enough density to meet ambitious production targets.
The land-use decision-making process should be improved to ensure local representatives do not hamper the city’s ability to meet its stated housing goals.
The city must enact property tax reform and provide the right tax incentives to encourage mixed-income development and make housing construction financially feasible.
Key Data
560,000
— Number of additional housing units New York City needs by 2030 to meet existing needs and future population growth.
50,000
— Number of housing units that must be permitted annually to meet the city's housing needs, which is twice as many as issued in recent years.
40%
— Percentage fewer housing permits issued per resident in New York City compared to San Francisco.
22,000
— Number of vacant positions within the city government that could be utilized to improve basic operations like approval times.
20%
— Percentage of the city’s residential lots that have enough capacity under current zoning to make development worthwhile.
New York's climate plan requires more detailed analysis of the economic and financial impacts on businesses and households to ensure that decarbonization strategies do not inadvertently harm the state's economic competitiveness. Policymakers must prioritize cost-effective approaches and market-based incentives to achieve environmental goals while preventing industries from relocating to regions with lower compliance costs.
Recommendations related to Competitiveness
The state should identify and assess the economic impacts of mitigation strategies on various industries’ or geographies’ productivity and competitiveness, as changing costs exclusive to New York State may reduce industries’ ability to compete with bordering states.
The Final Scoping Plan should disaggregate the financial impacts of each strategy on businesses and households to help prioritize strategies that maximize equity and minimize negative economic impacts on jobs.
The state should utilize market incentives as much as possible, such as a fee system or a cap-and-trade system, to incentivize businesses and residents to choose low energy intensive goods without prescriptive regulation and higher costs.
Key Data
$300 billion
— Total costs through 2050 for the climate scenarios on a discounted present value basis.
85 percent
— The goal for reducing statewide greenhouse gas emissions from 1990 levels by 2050.
Local Law 97 aims to reduce greenhouse gas emissions from large buildings by 40 percent by 2030 and 80 percent by 2050, but current regulations threaten to penalize dense, economically vital uses like restaurants and data centers. To ensure cost-effective compliance and maintain economic competitiveness, the City should implement flexible adjustments, such as carbon trading and expanded renewable energy credits, to account for the post-pandemic financial landscape.
Recommendations related to Competitiveness
The City should adjust credits appropriately for lack of renewable energy availability to encourage electrification.
The City should expand allowable RECs to offshore wind and a portion of Tier 2 RECs to provide buildings with flexibility.
The City should specify, expand, and continue emission limit adjustments for density and specific uses to alleviate counterproductive disincentives to density and certain economically vital uses.
The City should specify and extend need-based building-level adjustments to encourage building owners to begin planning for compliance in good faith.
The City should allow carbon trading within an owner’s portfolio to allow owners of multiple buildings to target the most cost-effective emissions reductions across their assets.
The City should adjust limits and penalties appropriately to the post-pandemic economy to maintain citywide emissions targets.
Key Data
$268
— Maximum annual fine per metric ton for buildings with emissions above the limit.
24 percent
— Portion of buildings needing to cut emissions by more than half to comply with 2030 standards.
33 percent
— Reduction in emissions the median building will need to achieve by 2030.
40 percent
— Target reduction in emissions from large buildings by 2030.
80 percent
— Target reduction in emissions from large buildings by 2050.
25,000 square feet
— Size threshold for buildings subject to the emissions limits.
New York's proposed budget increases, which could reach $16.2 billion in fiscal year 2023 under legislative plans, threaten long-term fiscal stability by creating significant future budget gaps and potentially necessitating tax hikes. To maintain a competitive environment for residents and businesses, the state should prioritize building reserves, exercising spending restraint, and implementing rigorous performance management systems.
Recommendations related to Competitiveness
The Governor and the Legislature should adopt a budget that keeps to the Executive Budget’s top line on spending and focuses on allocating the $5 billion available for relief and recovery.
The Governor and Legislature should diligently manage and provide oversight of funded programs by developing plans, identifying goals, measuring activities and results, and ensuring accountability by managers and local governments.
The State should put funds in reserves to ensure the continued fiscal stability needed to roll back the tax increases so New York is a competitive location for residents and businesses.
The State should publish basic financial plan tables that show the receipts and disbursements with the one-house and enacted budgets to improve transparency.
It is past time to implement statewide performance measurement and management to ensure and assess how successful its spending is in delivering results efficiently for New Yorkers.
Key Data
$16.2 billion
— The proposed annual spending increase in the Legislature's budget plan for fiscal year 2023.
$7.7 billion
— The estimated budget gap in fiscal year 2026 if the Legislature's spending proposals are adopted.
$15 to $17 billion
— The estimated annual tax receipts shortfall that would result from a typical recession.
$55 billion
— The four-year tax receipts surplus compared to pre-pandemic projections.
$10.1 billion
— The proposed increase in State Operating Funds spending in the Governor's Executive Budget for fiscal year 2023.
New York City's high construction and operating costs make rental housing development financially unfeasible without tax incentives, as evidenced by operating expenses that are 50 percent higher than the national average. To maintain competitiveness and housing supply, the state must implement a well-crafted successor to the 421-a program that is available as-of-right and tailored to different market conditions.
Recommendations related to Competitiveness
State lawmakers should authorize an as-of-right tax exemption designed to foster rental housing development, minimize disruption of land and development markets, and help the City meet its affordable housing production goals.
The City should create a new option for mid-rise projects outside the PDA to make more projects feasible in moderate- to middle-income neighborhoods.
The City should offer Option B to all projects outside the PDA to improve the financial feasibility of these projects.
The City should track and evaluate program usage to inform successor programs through greater transparency and public reporting of data.
The City should work to align the incentive with other housing programs to reduce bureaucratic conflicts and red tape.
Key Data
50 percent
— The cost to operate a multifamily building in New York City is 50 percent higher than the national average.
30 percent
— New York's property taxes are 30 percent of rental income compared to 13 percent elsewhere in the country.
75 percent
— Without the tax exemption, rents would have to increase by 75 percent to generate a reasonable rate of return.
8 percent
— Construction costs increased 8 percent between February 2021 and February 2022.
3.7 percent
— New York City’s construction costs have historically increased faster than the overall rate of inflation, averaging 3.7 percent annually since 2010.
New York's economic competitiveness and stability would be improved by restraining recurring spending and rolling back tax increases that have resulted in the nation's highest combined business and top personal income tax rates. The state should also focus on managing programs for results and curtailing school aid to wealthy districts to ensure fiscal responsibility.
Recommendations related to Competitiveness
New York should take steps to restrain recurring spending to improve the state's competitiveness, stability, and recovery.
The State should ensure that State programs are targeted and managed for results to bolster competitiveness.
New York should start to roll back last year’s tax increases that made the state's combined business and top personal income tax rates the highest in the nation.
The State can restrain spending by curtailing school aid to wealthy districts, which provide enough local resources to fund a sound basic education.
Key Data
$5 billion
— Additional receipts expected in each of the next four years, dependent on continued economic recovery.
$3.6 billion
— Increase in State operating spending planned for next year.
$25.9 billion
— Increase in State operating spending over the next five years.
15 percent
— Level of state operating funds that the Executive Budget includes for deposits into reserve funds.
17 percent
— Commonly accepted national benchmark for reserve funds as a percentage of state operating funds.
$2.5 billion
— Additional amount needed to be added over time to reach the 17 percent reserve fund benchmark.
New York's high business and personal income taxes, combined with regulatory costs, hinder the state's ability to attract and retain businesses. Rather than relying on often ineffective economic development incentives to offset these burdens, the state should focus on improving the transparency, oversight, and evaluation of its existing programs.
Recommendations related to Competitiveness
The State should present a unified economic development budget so that New Yorkers know how much is really being spent.
The State should establish standardized metrics for economic development initiatives to identify the impact of each deal and program.
The State should improve its Database of Deals to publicly and regularly report on the cost, progress, and evaluation of all economic development initiatives.
Program design should be improved by requiring private “skin in the game,” performance metrics and penalties for non-performance, and evaluation.
Oversight should be improved by restoring procurement oversight powers of the Comptroller’s Office and increasing funding for the Authorities Budget Office.
Key Data
$10 billion
— Total annual cost of economic development programs in New York State in 2019.
8
— Number of criteria met by the Database of Economic Incentives out of 20 identified for a sound database.
20
— Total number of criteria identified for a sound economic development database.
3
— Number of years of spending data currently included in the Database of Economic Incentives.
New York aims to improve its economic competitiveness by allowing recent tax increases to expire and accelerating middle-class tax relief, while addressing long-term fiscal challenges like a looming $3.5 billion fiscal cliff. To ensure future stability and growth, the state must prioritize infrastructure investments, expand Medicaid cost-saving innovations, and implement housing supply reforms.
Recommendations related to Competitiveness
Accelerating the middle-class tax cuts will provide important relief and help make New York more attractive to individuals and families.
New York will be even more competitive if it allows last year’s personal income and business tax increases to sunset as in law.
Critically needed investments to bring roads and bridges to a state of good repair will both help our economy and reduce long-run costs.
The State should engage in long-term planning and prioritization to ensure the right projects are pursued.
The effort to identify Medicaid innovations that improve access and care and lower costs should be expanded to help transform New York’s entire health system.
The State should increase the supply of housing by encouraging transit-oriented development, lifting the floor area ratio cap, and easing the conversion of hotels and offices to residential use.
Key Data
$3.5 billion
— The amount of the looming fiscal cliff facing the state budget.
New York State currently imposes the highest top personal income and corporate tax rates in the nation, which creates financial incentives for high-income individuals and businesses to relocate or avoid the state. To improve economic competitiveness and reduce fiscal volatility, the state should lower, reverse, or allow these recent tax increases to sunset.
Recommendations related to Competitiveness
Given the State’s stronger-than-expected receipts throughout the pandemic, the latest tax increases should be lowered, reversed, or at least allowed to sunset.
The Executive and Enacted budgets should include a Unified Economic Development Budget (UEDB) that includes the costs of all economic development programs for the coming fiscal year.
The State should improve its reporting of economic development activities in the Database of Economic Development Incentives, which currently lacks key information.
The State should act to facilitate housing development and affordability, especially downstate, to help stabilize market prices and increase regional housing supply.
Key Data
$3.5 billion
— Recurring program spending supported by federal aid in fiscal year 2025 but not thereafter.
$13 billion
— One-time funds for New York’s schools provided by the ARP and other federal COVID aid sources.
$2 billion
— Structural imbalance in the MTA operating budget that will emerge when federal aid runs out.
$2.9 billion
— Amount the MTA can save annually by increasing subway and bus operations and maintenance productivity.
$1 billion
— Net annual contributions the congestion pricing program is expected to generate for the MTA capital plan.
$15 billion
— Investment supported by the congestion pricing program.
Local Law 97’s implementation risks creating economic strain on New York City’s real estate market, particularly for buildings with lower revenue or those hosting energy-intensive but economically vital uses like data centers and restaurants. To maintain the city's competitiveness, the City should tailor compliance rules to provide flexibility, such as allowing portfolio-based carbon trading and adjusting limits to reflect post-pandemic economic realities.
Recommendations related to Competitiveness
DOB should specify, expand and continue emission limit adjustments for density and specific uses to alleviate counterproductive disincentives to economically vital activities like data centers and restaurants.
The City should allow carbon trading within an owner’s portfolio to enable owners to identify the most cost-effective emissions reductions across their assets.
DOB should adjust limits and penalties appropriately to the post-pandemic economy to account for permanent shifts in work patterns and financial strain on the real estate market.
The City should expand allowable RECs to offshore wind and a phased-down portion of Tier 2 RECs to provide buildings with flexibility while the electric grid remains fossil fuel-powered.
DOB should adjust credits appropriately for lack of renewable energy availability to encourage electrification, mitigating penalties if the greening of the grid is slower than planned.
Key Data
$88.33
— Asking rent per square foot for Class A offices in Manhattan’s Midtown South as of the fourth quarter of 2020.
$61.55
— Asking rent per square foot for Class A offices in Brooklyn as of the fourth quarter of 2020.
$2.88
— Average penalty per square foot for smaller offices outside core Manhattan in the first compliance period.
$14.40
— Annual expenses per square foot for rental apartments outside core Manhattan, including taxes, maintenance, and energy.
$62.33
— Manhattan’s annual average residential rent per square foot in January 2021.
$43.89
— Annual average residential rent per square foot in Brooklyn in January 2021.
New York State's fiscal year 2022 budget agreement increases spending to $212 billion and raises personal income and corporate taxes by over $4.3 billion annually, moves that threaten the state's economic competitiveness. By relying on temporary federal aid to support recurring expenses and failing to target school aid to the neediest districts, the budget misses an opportunity to ensure long-term fiscal sustainability.
Recommendations related to Competitiveness
The State should empanel a Health System Transformation team to reform the Global Cap, address long term Medicaid spending, and focus on health system-wide reforms to restrain cost, reduce disparities, and improve quality.
The State must better target school aid to districts with the greatest needs to ensure long-run fiscal sustainability, rather than continuing to supplement wealthy districts.
The enacted budget report must identify how the federal funds are being used so New Yorkers can determine if those uses are wise and how they affect the State in the long-run.
Lawmakers should avoid raising personal income and corporate taxes, as these increases provide incentive for highly taxed New Yorkers to leave and increase the cost of doing business.
Key Data
$22 billion
— The amount of additional funds available over the next two years compared to the Governor's initial budget proposal.
$4.3 billion
— The annual amount by which personal income and corporate taxes will be increased under the new budget agreement.
0.75 percentage points
— The amount by which corporate taxes will be increased, further raising the cost of doing business in New York.
$212 billion
— The total amount of planned All Funds spending in the fiscal year 2022 budget.
$5 billion
— The estimated increase in school aid, representing the largest increase in recent history.
New York's proposed tax increases on high earners and businesses are unnecessary and economically risky, as the state has sufficient funds from federal aid and strong tax revenues to support critical services. Maintaining the state's competitiveness requires avoiding these tax hikes, restructuring spending, and modernizing education aid rather than increasing it.
Recommendations related to Competitiveness
New York should enact a budget that does not raise income and business taxes to maintain its attractiveness for residents and businesses.
The State should curtail unproductive economic development programs to strengthen New York's future.
The Foundation Aid formula should be modernized to account accurately for support by local resources to ensure education aid is directed toward high-need districts.
The State should revive the MRT and expand its charge to Health System Transformation to identify Medicaid efficiencies and improve the effectiveness of public health systems.
State increases in education aid should be directed toward high need districts, while support for districts raising sufficient local resources should be held flat or reduced.
Key Data
16.49 percent
— The current combined State, City and MTA tax rate for New York City businesses, which is already the highest in the nation.
$1.2 million
— The average amount paid to both the State and City by New Yorkers who earn over $10 million annually.
$7 billion
— The amount of new revenue the proposed tax increases on high income earners and businesses would generate annually.
$200 billion
— The level of state spending proposed in the budget, which would be a doubling over 15 years.
94 percent
— The portion of the original projected four-year revenue loss offset by tax revenue strength and federal aid.
$3.7 billion
— The amount by which revenues for the current and next two fiscal years are projected to be higher than before the pandemic.
New York State should avoid tax increases that threaten its economic competitiveness by potentially driving away high-income earners, who currently finance a significant portion of the state budget. Instead, the state should pursue alternative strategies such as shifting capital financing to long-term debt and reducing unproductive economic development spending to stabilize its long-term fiscal outlook.
Recommendations related to Competitiveness
Reasonably shifting more capital financing to long-term debt would provide sufficient resources to make the tax increase unnecessary.
Reducing unproductive economic development and low priority capital spending would provide sufficient resources to make the tax increase unnecessary.
The State should smooth the year-to-year fluctuations in aid to avoid a sudden drop-off.
Reducing aid to high-income districts would provide resources to increase aid to others.
The State should adjust timing of its own aid or flexible federal funds to the extent possible.
Key Data
$1.6 billion
— Savings in fiscal year 2022 achieved by reducing planned capital disbursements by 10 percent and financing up to 50 percent of the remaining paygo capital spending with debt.
$713 million
— Yield in fiscal year 2022 from a 50 percent reduction in proposed economic development capital spending plus financing 50 percent of the remaining paygo spending with debt.
14.7 percent
— New York's combined top marginal tax rate, which is the highest in the nation.
$1.2 million
— Average personal income tax liability for taxpayers with taxable income over $10 million.
$1.6 billion
— Amount of State aid estimated to be disbursed to high-income districts that already support a sound basic education without State funding.
Borrowing to fund state operations creates long-term costs that burden future taxpayers and threaten the state's ability to remain a competitive place for residents and businesses. To ensure fiscal stability, the state should prioritize spending restraint and transparency, including balancing budgets in accordance with Generally Accepted Accounting Principles (GAAP).
Recommendations related to Competitiveness
The State should balance this year’s budget without long-term borrowing for operating expenses to avoid hampering New York's competitiveness.
Borrowing should not be used to increase state operating spending, inclusive of any federal stimulus aid, more than 2 percent or the inflation rate, whichever is lower, to ensure spending remains sustainable and supports a competitive business environment.
The State should adopt, in law and practice, fiscal integrity and transparency measures that include the transition to an annual State operating funds budget that is balanced in accordance with GAAP to maintain New York's status as a competitive place to live and grow businesses.
The State Comptroller should assess whether the fiscal stability plan is realistic and feasible, and approve each instance of borrowing for operations only if it comports with a realistic and feasible plan to prevent debt burdens that constrain future services and competitiveness.
The amount of borrowing used should be limited to what is needed after the State exhausts other gap-closing strategies and uses new federal aid to reduce budget gaps to avoid obligating future New Yorkers to pay for current services.
Key Data
$11 billion
— The amount of debt the State is proposed to have the authority to issue for operations.
$1.7 billion
— The amount of Medicaid payments the State shifted by three days to obscure the program's fiscal outlook.
2 percent
— The maximum rate by which state operating spending should increase, inclusive of federal stimulus aid, when borrowing.
$8 billion
— The amount of short-term debt the Fiscal Year 2022 Executive Budget proposes re-authorization for one year.
$3 billion
— The amount of the line of credit for state agencies proposed in the Fiscal Year 2022 Executive Budget.
New York's Scaffold Law imposes strict liability on contractors, driving up insurance premiums and increasing development costs by an estimated 7% compared to other states. Replacing this standard with a comparative negligence model could lower construction costs and allow for the creation of 12,600 additional affordable housing units.
Recommendations related to Competitiveness
The state should include reform of Labor Law §§ 240/241 (the “Scaffold Law”) in the 2021-22 Executive budget proposal to reduce development costs and improve economic competitiveness.
New York should replace the existing strict liability standard with a more common-sense comparative negligence standard to lower insurance premiums and construction costs.
Key Data
7%
— The Scaffold Law's strict liability standard has increased affordable housing and other development costs by an estimated 7%.
12,600
— If the excessive costs associated with the Scaffold Law had been invested in housing during the current 5-year housing plan, an additional 12,600 affordable housing units could have been created and preserved.
Reinstating the stock transfer tax would likely harm New York's economic competitiveness by driving away securities firms and jobs, as evidenced by historical data showing that such taxes lead to trade migration and reduced tax revenue. Instead of reviving this dormant tax, policymakers should pursue alternative strategies to address the state's projected $17 billion budget gap.
Recommendations related to Competitiveness
Policymakers should leave the STT dormant and find alternative ways to fill the budget gap.
New York’s leaders should reject proposals to revive the STT.
Key Data
$17 billion
— The projected budget gap for New York State in the coming year.
33 percent to 19 percent
— The decrease in New York City's share of national securities employment between 1990 and 2019.
18 percent
— The portion of State tax collections accounted for by the securities industry in fiscal year 2020.
$4 billion
— The amount the STT would have yielded in fiscal year 2020, significantly less than the $13 billion claimed by advocates.
30 percent
— The outflow of trading activity in listed Swedish companies after the country introduced a 2 percent STT in 1984.
16 percent
— The decrease in trade volume in France after the country imposed a STT in 2012.
New York State has spent over $7 billion on film and television tax credits that fail to produce meaningful economic gains or employment growth, often subsidizing projects that would have filmed in the state regardless. To improve fiscal health and economic efficiency, the state should eliminate these ineffective incentives, which are significantly more generous than those offered by competing states.
Recommendations related to Competitiveness
The State should continue to decrease the film tax credit until the program is eliminated.
Stop awarding from future year allocations to ensure that a cap effectively limits the increase in state liability each year.
Stop spreading claims over 3 years, as this extends the distance between job creation and state financial impact.
Decrease the credit substantially to 10 percent of qualified costs and eliminate the annual cap to reduce program costs.
Further decrease the share of expenses that can be claimed in New York City to push production to areas of the state with greater economic development needs.
Key Data
$7.8 billion
— Total amount of tax incentives allocated to the film and television industry by New York State since 2004.
9.7 percent
— The unemployment rate in New York State during the economic downturn caused by the COVID-19 pandemic.
$9 billion
— The size of the New York State budget gap.
$19 billion
— The projected annual deficit for New York State in fiscal year 2023.
$420 million
— The annual cap on the film tax credit through 2025.
$12 million and $15 million
— The annual amount collected by Saturday Night Live between 2015 and 2018 despite being filmed in New York City since 1975.
Reinstating the Stock Transfer Tax would likely drive financial firms and jobs out of New York, as the industry is highly mobile and sensitive to such costs. This tax would also increase investment costs for New Yorkers and fail to generate the projected revenue due to widespread tax avoidance and relocation.
Recommendations related to Competitiveness
Policymakers should leave the STT dormant and find alternative ways to fill the budget gap.
New York’s leaders should reject proposals to revive the STT.
Key Data
$17 billion
— The expected budget gap for New York State in the coming year.
$4 billion
— The amount the Stock Transfer Tax would have yielded in fiscal year 2020.
$13 billion
— The amount advocates claim the Stock Transfer Tax could yield in annual revenue.
33 percent to 19 percent
— The decrease in New York City's share of national securities employment between 1990 and 2019.
18 percent
— The share of State tax collections accounted for by the securities industry in fiscal year 2020.
6 percent
— The share of City tax collections accounted for by the securities industry in fiscal year 2020.
New York City faces a fiscal crisis requiring $1 billion in recurring labor savings to avoid layoffs and maintain fiscal stability. The city should implement structural reforms to employee benefits, work rules, and productivity differentials to align compensation with other public and private employers while improving service efficiency.
Recommendations related to Competitiveness
The City should implement premium-sharing for employee and retiree health insurance to bring benefits in line with other public employers.
The City should work with the Municipal Labor Committee to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the Variable Supplement Funds (VSFs) and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund for the tax-deferred annuity (TDA) should be sharply reduced through State legislation.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
The City should be given the flexibility to shift at least half of the advanced life support (ALS) ambulances to a one paramedic, one EMT staffing model.
The City could make four firefighters the standard staffing for engine companies.
The pay scale for sanitation workers should be revised to eliminate or reform productivity differentials that incentivize standard operating procedures.
The City should standardize work hours to a forty-hour work week for all employees.
The City should eliminate the Absent Teacher Reserve (ATR) as a permanent, paid assignment.
Key Data
$1 Billion
— Recurring savings target from negotiations with labor unions in the Adopted Budget for Fiscal Year 2021.
$50.2 Billion
— Projected personnel costs in fiscal year 2021 out of the $93.5 billion budget.
$1.1 Billion
— Uniformed-agency overtime budget in fiscal year 2019.
$1.2 Billion
— Estimated annual value of the taxpayer-provided guarantee for the tax-deferred annuity (TDA).
$4.9 Billion
— Estimated assets for the police Variable Supplement Fund (VSF).
$136 Million
— Amount spent by the City on the Absent Teacher Reserve (ATR) in fiscal year 2018.
Housing affordability for New Yorkers of all incomes is important to the competitiveness of the New York City region. The panelists discuss strategies for spurring housing production and changes that should be made to laws and local zoning regulations. Introduction Karim Hutson Founder & Managing Member, Genesis Companies Presentation of Report Findings Sean…
72% is the share of firms which have experienced challenges in the switch to remote work spurred by the pandemic. The datapoint is from a survey of business leaders representing several key NYC economic sectors. We convened a panel of five CBC Trustees representing real estate, finance, law, health, and…
New York's high combined state and local tax rates for businesses and high-income earners threaten the state's economic competitiveness by potentially driving away taxpayers and capital. The state's declining share of national millionaires and capital gains highlights the risk that excessive tax burdens pose to long-term revenue stability.
Recommendations related to Competitiveness
Policymakers should ensure that any consideration of tax increases includes the impact on State and local economic competitiveness.
Improving the fiscal outlook for both the State and the City primarily requires controlling expenditures and advocating for federal aid.
As New York’s leaders look to close budget gaps, they must be cognizant that combined State and City PIT rates are the second highest in the nation, while combined CFT rates are the highest.
Key Data
16.49 percent
— The sum of the State effective tax rate, City rate, and MTA taxes on businesses operating in New York City.
12.696 percent
— The top personal income tax rate imposed in New York City when combining state and local rates.
15 percent
— The decrease in New York's share of the nation's millionaires between 2010 and 2017.
20 percent
— The decrease in New York's share of national capital gains earned by millionaires between 2010 and 2017.
$1.4 billion
— The amount of additional tax revenue New York could have generated if its share of national millionaire capital gains had remained at 2010 levels.
To address fiscal stress while maintaining economic competitiveness, governments should prioritize long-term structural adjustments like aligning public sector compensation with private sector standards and avoiding long-term borrowing for operating expenses. Strategic fiscal management, such as postponing non-essential capital projects and utilizing temporary rather than permanent tax increases, helps preserve a jurisdiction's attractiveness to businesses and residents.
Recommendations related to Competitiveness
To the extent state or local government employees’ compensation is brought into line with that of the private sector in the long run, these adjustments also have the positive impact of enhancing the jurisdictions’ attractiveness by helping to keep taxes at competitive levels.
Governments should minimize risks to effective service delivery and competitiveness by making cuts to capital projects that are not for essential infrastructure or projects that are otherwise desirable expansions or enhancements that can safely be postponed.
Raising tax rates temporarily for an emergency period moderates the impact on competitiveness.
It may be preferable to have any tax increase be relatively small for a broad swath of the population to avoid harming competitiveness by causing high income households to relocate.
Key Data
$100 million
— Amount of capital spending avoided that saves about $6.5 million annually in debt service.
$6.5 million
— Annual savings in debt service achieved by avoiding $100 million in capital spending at current interest rates for 30-year bonds.
two-thirds
— Maximum portion of any rainy day fund recommended for use in the first year to maintain fiscal stability.
New York City's economic competitiveness relies on maintaining affordability, which requires balancing high housing costs with lower transportation expenses. To sustain this advantage, the city must address housing supply constraints and ensure the Metropolitan Transit Authority remains fiscally and operationally sound without significantly increasing costs to households.
Recommendations related to Competitiveness
The Metropolitan Transit Authority should bring its system closer to a state of good repair and improve service without significantly increasing the cost of transportation to households to help New York City maintain its competitive advantage.
New York City should consider strategies and policies to address housing supply and alleviate housing cost pressures in order to maintain competitiveness.
Programs like Fair Fares should be successfully implemented to buoy transportation affordability for lower-income households who rely on public transit.
Key Data
$1,778
— The monthly housing cost for a median household in New York City, which ranks as the 5th most expensive among 20 competitor cities.
$832
— The monthly transportation cost for a median household in New York City, which is the least expensive among peer cities.
$69,211
— The median annual household income in New York City, ranking as the 8th highest among the 20 cities analyzed.
6.2%
— The growth rate of inflation-adjusted rents in New York City between 2014 and 2017.
The Metropolitan Transportation Authority's emergency regulations, which automatically debar contractors for minor budget or schedule overruns, discourage companies from bidding and reduce the pool of available expertise for critical infrastructure projects. This policy creates excessive risk for vendors, as evidenced by a recent design-build contract where multiple firms declined to submit proposals due to the restrictive contract terms.
Recommendations related to Competitiveness
The MTA Board should work with MTA staff to revise the regulations to not mandate automatic debarment.
The MTA Board should follow the law to allow the MTA discretion to take into consideration the circumstances of each project and the pool of vendors able to perform the particular work.
Key Data
$55B
— The size of the MTA's largest ever capital plan, which faces delivery challenges.
$38.8 million
— The value of a design-build contract for station accessibility upgrades that failed to attract three potential vendors.
10%
— The threshold for budget or schedule overruns that triggers automatic debarment for MTA contractors.
three
— The number of vendors that declined to submit proposals on a design-build contract due to excessive risk.
New York faces a significant fiscal imbalance with a growing budget gap driven by rising spending, particularly in Medicaid and education. To protect the state's economic competitiveness and prepare for potential recessions, the state must restrain spending rather than increasing taxes, which are already among the highest in the nation.
Recommendations related to Competitiveness
New York State should reconstitute the Medicaid Redesign Team to identify savings.
The State should focus education aid on needy districts to fund fully a sound basic education.
New York should reduce unproductive economic development program spending.
The State should consider reforms to retiree health benefits that were proposed repeatedly in recent Executive Budgets.
The Executive, with the support of the Legislature, should exercise powers granted under the Medicaid global cap to prevent Medicaid spending from exceeding budgeted amounts in future periods.
Key Data
$6.1 billion
— The State’s mid-year budget update reports this amount as the budget gap for the next fiscal year.
$28.8 billion
— The actual four-year budget gap, which is understated in official reporting.
48 percent
— The amount by which New York’s State and local tax burden is higher than the national average, threatening the state's competitiveness.
$4.4 billion
— The amount New York spends annually on economic development programs, with little evidence that many of these investments produce results.
8.82 percent
— New York State’s top marginal personal income tax rate, which is the sixth highest in the nation.
$1.6 billion
— The amount of state school aid received by wealthy districts with sufficient local resources to provide a sound basic education in school year 2017-2018.
New York City's long-term economic competitiveness is hindered by high housing costs and long commute times, which discourage residents and businesses. To address these challenges, the city must increase housing supply by reforming zoning and property tax policies while encouraging suburban development to meet regional demand.
Recommendations related to Competitiveness
Lifting the cap on floor-area ratio for residential buildings would allow property owners to build both more market rate and affordable units.
Lawmakers should ensure that zoning codes match the needs of a growing region to boost housing production.
The city should reform the property tax system to make it easier to build rental housing without the need for substantial subsidies.
Lawmakers should find ways to incentivize the suburbs to build sufficient housing to meet the regional demand.
Key Data
920,000
— Renter households in New York City that were rent burdened, paying at least 30 percent of their incomes in rent.
30 percent
— Income threshold used to define rent-burdened households.
50 percent
— Income threshold used to define severely rent-burdened households.
90 percent
— Portion of severely rent-burdened households that were low income.
22 percent
— Share of all housing units produced in 2017 that were in 40-plus story buildings.
23 percent
— Share of units in 40-plus story buildings that were income-restricted.
$15 billion is the CBC's estimate of the three-year revenue shortfall for New York City government in a recession. First Deputy Mayor Dean Fuleihan joined CBC President Andrew Rein for a wide-ranging discussion about the City's budget, closing Rikers, access to hydropower, NYC's competitiveness, and more.
First Deputy Mayor Dean Fuleihan joined CBC President Andrew Rein for a wide-ranging discussion about the City's budget, closing Rikers, access to hydropower, NYC's competitiveness, and more.
Implementing a non-exclusive commercial waste zone model with three to five carters per zone would maintain market competition and service quality while achieving a 50 percent reduction in vehicle miles traveled. This approach avoids the risks associated with exclusive zones, which can stifle incentives for efficiency and potentially force the city to rely on DSNY collection services that cost twice as much as the private sector.
Recommendations related to Competitiveness
We urge enactment of non-exclusive waste zones, which will achieve most of the benefits resulting from a zone system while maintaining competition and customer service, and minimizing fiscal risk to the City.
We urge the City Council to amend Intro 1574 to permit DSNY to award contracts to three to five carters per zone, a balanced approach that achieves most of the benefits of zones, while maintaining competition and minimizing risk.
Key Data
50 percent
— Projected reduction in vehicle miles traveled (VMT) under a non-exclusive commercial waste zone model.
58 percent
— Projected reduction in vehicle miles traveled (VMT) under an exclusive commercial waste zone model.
three to five
— The number of carters per zone recommended for the non-exclusive model.
At a fireside chat with CBC President Andrew Rein, NYC Comptroller Scott Stringer discussed City fiscal policy, the need for rainy day reserves, and how to promote New York City’s competitiveness, among other topics.
Establishing non-exclusive commercial waste zones in New York City would significantly reduce vehicle miles traveled while maintaining market competition and customer choice. This approach avoids the risks associated with exclusive zones, where a single provider lacks incentives to control costs or improve service quality.
Recommendations related to Competitiveness
The City should establish a non-exclusive commercial waste zone program to maintain competition and customer choice.
The City should include detailed performance metrics in its request for proposals to be tracked and made publicly available for robust program evaluation.
The City should establish commercial waste zones to increase efficiency and reduce vehicle miles traveled.
Key Data
50%
— The reduction in vehicle miles traveled (VMT) that would be produced by moving from the current system to a zone model.
58%
— The overall reduction in vehicle miles traveled (VMT) provided by exclusive zones.
86%
— The portion of potential vehicle miles traveled (VMT) reduction that could be achieved through non-exclusive zones.
New York state legislators introduced 69 bills in 2019 aimed at economic development, utilizing various tax incentives, grants, and loan programs to stimulate growth across specific industries and small businesses. These proposed measures include significant fiscal commitments, such as hundreds of millions of dollars in tax relief and program funding, intended to bolster the state's economic landscape.
Key Data
$440 Million
— Total funding increase proposed for the Excelsior Linked Deposit Program.
$275 Million
— Fiscal impact of making real property owned by small businesses eligible for the STAR property tax exemption.
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$100 Million
— Annual cap for the new tax credit for music and video game production industries.
$65 Million
— Proposed increase for the Excelsior Linked Deposit Program.
$30 Million
— Fiscal impact of the Farm Workforce Retention Credit.
The NYC Ferry system requires high public subsidies, with per-ride costs significantly higher than other transit options like the subway or bus, and these costs are projected to increase with planned service expansions. The lack of transparency in the ferry's finances and its reliance on high subsidies for a relatively small number of riders raise questions about whether this is the most efficient use of city transportation funding.
Recommendations related to Competitiveness
City officials should reconsider the policy choices that contribute to the high subsidies before implementing any further expansion of ferry service.
The city should evaluate options that would reduce the level of subsidy for the ferry system to ensure it meets transportation needs efficiently.
Officials should charge higher fares on weekends and for noncommuters to offset the cost of subsidies for daily commuters.
The city should implement dynamic pricing models for long, low-productivity routes that require substantial subsidies and see demand spikes on weekends.
A different fare structure could be adopted to mitigate the need to charter vessels or purchase larger boats.
Key Data
$10.73
— The operating subsidy per ride for the NYC Ferry in fiscal year 2018.
$24.75
— The projected public subsidy per ride for the planned Coney Island ferry route.
22%
— The farebox operating ratio for the NYC Ferry in 2018, indicating the share of operating costs covered by fare revenue.
$56.7 million
— The total operating costs for the NYC Ferry in fiscal year 2018.
$1.05
— The operating subsidy per trip for New York City Transit.
4.1 million
— The total number of rides provided by the NYC Ferry in 2018.
5 is the number of years Alicia Glen was the Deputy Mayor for Housing and Economic Development under Mayor Bill de Blasio. She joins the podcast to reflect on her tenure as Deputy Mayor, the state of the city in 2014, where it stands now, and where it should be…
The proposed pied-à-terre tax on high-value homes owned by nonresidents threatens to reduce the city's appeal to important economic contributors and negatively impact the luxury housing market. Instead of implementing such piecemeal taxes that harm the city's competitiveness, policymakers should pursue comprehensive property tax reform and avoid creating new, potentially damaging tax burdens.
Recommendations related to Competitiveness
The property tax should be levied based on the characteristics of the property, not its ownership.
The extensive disparities in the property tax system should be addressed through comprehensive reform, not another piecemeal approach.
Revenues should not be dedicated, but rather allocated through the budget process.
The State should not adopt a pied-a-terre tax without thoughtful deliberation about whether it is needed and revision of the proposal to mitigate the negative impacts.
Lawmakers should seriously consider lower tax rates that will do less harm to the attractiveness of NYC.
Key Data
$5 million
— The value threshold for nonresident-owned homes subject to the proposed annual property tax surcharge.
0.5 percent
— The starting annual property tax surcharge rate for homes worth more than $5 million.
4.0 percent
— The maximum annual property tax surcharge rate for the value of homes greater than $25 million.
$650 million
— The projected annual revenue yield from the proposed pied-à-terre tax.
five years
— The duration for which the 'temporary' State millionaires personal income tax surcharge is likely to be extended.
25,000 is the number of jobs that would have been created under a now-defunct deal with Amazon to create a second headquarters in Long Island City, Queens. Vishaan Chakrabarti, founder of the Practice for Architecture and Urbanism (PAU), discusses the deal and how its failure may impact New York City's…
Watch the original segment here . Progressive, first, best are all terms have been used to describe New York’s economy. One non-partisan watchdog group took a look at how responsible the state has been with its money since Andrew Cuomo took office eight years ago. "See what has actually changed…
Watch the original broadcast here . As Governor Cuomo's second term comes to a close, and voters decide whether to give him a third term, the Citizens Budget Commission is looking at how the state has fared over the past eight years. The group is it out with a new…
Legalizing sports betting in New York offers potential economic benefits, but requires careful consideration of conservative revenue projections and the competitive landscape of neighboring states. Policymakers must also account for the regressive nature of gambling taxes, the potential cannibalization of existing gaming revenues, and the social costs associated with increased problem gambling.
Recommendations related to Competitiveness
State leaders should ensure that revenue estimates for sports betting are conservative to account for the difficulty in predicting the transition from illicit to legal markets.
Taxes should be designed thoughtfully in a competitive marketplace to ensure operators remain invested and the legal market can effectively compete with illegal alternatives.
Legislators must consider the potential impact of sports betting on other gambling revenues, as new gaming options often cannibalize existing market share from incumbents.
Legislation should acknowledge that gambling taxes are regressive and increased prevalence of gambling will impose social costs, necessitating funding for problem gambling services.
Key Data
$150 billion
— Annual projected size of the illegal sports betting market in the United States.
$5.2 billion to $2.6 billion
— Decline in Atlantic City gambling revenues from 2006 to 2016 due to regional competition and other factors.
$254 million
— Estimated annual state and local economic benefit attributable to New York from sports betting.
$112 million
— Gaming taxes generated by New York commercial casinos in fiscal year 2017-2018.
$3 billion
— Annual revenue generated by state-run lotteries for education aid in New York.
$3.5 million
— Amount allocated in the Fiscal Year 2019 Enacted Budget for problem gambling services.
New York City's Capital Commitment Plan has reached $82 billion, making it critical to evaluate the effectiveness of existing Project Labor Agreements in reducing costs and improving project delivery. Independent analysis is necessary to determine if these agreements have achieved their projected savings and to identify strategies for boosting construction productivity amidst rising inflation.
Recommendations related to Competitiveness
The City should commission evaluations of the four expiring Project Labor Agreements while there is still time to decide if it is in the City’s interest to amend or renew them.
The Mayor’s Office of Contract Services should identify and evaluate other City efforts to boost construction productivity.
Decisions regarding Project Labor Agreements should be made with transparency and be based on a detailed, independent analysis of performance and experience.
Key Data
$347 million
— Projected savings on $8 billion in construction work from the 2015 Project Labor Agreements.
$8 billion
— Total value of construction work covered by the 2015 Project Labor Agreements.
$82 billion
— Total value of the current Capital Commitment Plan.
4 to 5 percent
— Average annual rate of construction inflation since the City signed the four Project Labor Agreements.
75% is the share of jobs gained since the recession in the NYC metropolitan region that were created in New York City, a datapoint revealed in a forthcoming report from the Department of City Planning. Marisa Lago, Director of the Department and Chair of the City Planning Commission, joined CBC…
New York State is considering a wide array of legislative proposals aimed at bolstering economic development through tax incentives, grants, and loan programs for small businesses, startups, and specific industries. These initiatives seek to enhance the state's business environment by reducing costs, supporting innovation, and providing targeted financial assistance to various sectors.
Key Data
$440 Million
— Total funding increase for the Excelsior Linked Deposit Program.
$200 Million
— Funding dedicated to business startups within the Excelsior Linked Deposit Program.
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$20 Million
— Fiscal impact of the HIRE NY act providing loans for microbusiness hiring.
$2 Million
— Fiscal impact of the Transitional Green Development Program to assist upstate communities.
$1.5 Million
— Fiscal impact of the Microenterprise Development Fund.
New York State is considering a wide array of legislative proposals aimed at bolstering economic development through tax incentives, grants, and loan programs for various industries including manufacturing, technology, and small businesses. These initiatives seek to enhance the state's business climate by reducing costs, supporting startups, and providing targeted financial assistance to specific sectors.
Key Data
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$1-$2 Million
— Fiscal impact of the Small Business Innovation Research Program outreach and counseling.
$65 Million
— Increase in funding for the Excelsior Linked Deposit Program.
$440 Million
— Total funding increase for the Excelsior Linked Deposit Program.
$200 Million
— Amount dedicated to business startups within the Excelsior Linked Deposit Program.
$500,000
— Annual grant amount for the GrowNY pilot program.
New York state spends billions annually on economic development programs that lack evidence of success, with job growth outside New York City lagging significantly behind the national average. Instead of relying on ineffective, narrowly targeted tax breaks and projects, the state should prioritize broad investments in infrastructure, workforce development, and higher education to foster a more competitive business environment.
Recommendations related to Competitiveness
Publish a “database of deals” that includes funds committed and disbursed to each recipient across all programs, as well as project progress and results to improve transparency and accountability in economic development.
Use a unified economic development budget, reflecting the full scope of costs including tax expenditures, agency and authority spending, and the value of discounted power, to better plan for future years.
Standardize metrics across economic development programs, so that results can be compared.
Improve program design so that benefits are provided retroactively based on performance, not up front; eligibility is standardized rather than discretionary; and results are regularly evaluated to ensure effective use of public resources.
Make administrative reforms to ensure transparent, competitive procurement and stronger oversight.
The state should consider approaches that provide more widespread benefit, such as investments in infrastructure, workforce development, and higher education, as well as a more competitive tax system, to improve New York’s ability to attract and retain employers.
Key Data
$3 Million
— Appropriation for an upstate luxury golf tournament deemed to be an economic development initiative.
$4 Billion
— Amount spent on economic development programs in fiscal year 2016.
$2.4 Billion
— Amount of tax breaks included in the fiscal year 2016 economic development spending.
$4.6 Billion
— Amount spent by local governments and authorities on economic development in fiscal year 2016.
$1.7 Billion
— New appropriations for economic development in the fiscal year 2019 budget.
$300 Million
— Appropriation for a High Technology Innovation and Economic Development Infrastructure Program.
The federal Tax Cuts and Jobs Act threatens New York's economic standing by capping state and local tax deductions, which widens the tax cost differential for high-income residents and businesses compared to other jurisdictions. This policy shift risks driving away taxpayers and businesses while potentially triggering unplanned local personal income and business tax increases.
New York City's economic development efforts, which cost $3.2 billion annually, require more rigorous standards for discretionary tax expenditures and increased transparency to ensure investments effectively foster job growth. By prioritizing infrastructure in underdeveloped neighborhoods and utilizing conduit financing for key sectors, the city can better align its economic strategy with the goal of creating broad-based opportunities.
Recommendations related to Competitiveness
The City should establish more detailed standards for awarding discretionary tax expenditures to ensure economic development investments are sound.
The City should improve transparency and reporting on EDC projects to better evaluate the full package of benefits provided to recipients.
The City should make capital investments in infrastructure to support job growth in underdeveloped neighborhoods rather than for the benefit of individual firms.
The City should use conduit financing to support growth in the arts, health, and educational sectors as the primary form of support for these areas.
The City should keep the EDC's focus on job creation to ensure its mandate remains aligned with fostering a strong economy.
Key Data
$3.2 billion
— The annual cost of the City's economic development efforts in 2016.
$548 million
— The value of discretionary tax benefits awarded by the City in 2016.
87 percent
— The portion of conduit debt issued for cultural, educational, and health sectors since 2016.
16.2 percent
— The share of private employment in New York City located in Brooklyn as of 2016.
17 percent
— The growth in private employment in Brooklyn from 2013 to 2016.
New York allocates over $4 billion annually to economic development projects that often lack clear criteria, resulting in high costs per job and insufficient accountability. Implementing a unified budget, standardized metrics, and performance-based incentives is essential to ensure these investments actually improve the state's economic standing.
Recommendations related to Competitiveness
The state should establish a unified economic development budget to provide transparency regarding the $4 billion annual commitment.
New York must standardize metrics across all economic development initiatives to allow for accurate comparisons between programs.
The state should establish a database of deals that outlines every economic development incentive provided to businesses.
New York should improve program design so that incentives are only provided after an employer has fulfilled its job creation or capital investment promises.
The state must adopt administrative reforms to ensure procurement integrity within economic development spending.
Key Data
$4 billion
— Annual state allocation to economic development, including tax benefits.
$1 billion
— Taxpayer money allocated to 'silver-bullet' projects before a single new job was created.
$83 million
— State investment in a factory for an LED light company in DeWitt that ultimately failed.
$15 million
— Additional cost to taxpayers to properly equip the DeWitt factory for a new tenant.
290 jobs
— Number of jobs promised by the new tenant at the DeWitt facility.
$337,931
— Cost per job for the DeWitt project based on the state's investment.
New York City's economy has experienced strong growth since 2013, yet the city continues to invest billions annually in economic development programs that often lack sufficient transparency and cost-effectiveness. While some progress has been made in targeting conduit financing and evaluating tax expenditures, further reforms are needed, including stricter standards for discretionary tax benefits and more comprehensive reporting.
Recommendations related to Competitiveness
Make as-of-right tax expenditures more cost-effective with continued reform.
Create more detailed standards for awarding discretionary tax expenditures.
Make capital investments in infrastructure to support job growth in underdeveloped neighborhoods.
Manage EDC programs with a focus on job creation and improving transparency.
Use conduit financing to support growth in the arts, health, and educational sectors.
Establish a cap on the level of per-job subsidy to account for the wage level of the project’s industry and the amount of private investment leveraged.
Key Data
$3.2 billion
— The annual cost of the City’s economic development efforts in 2016.
$590,269
— The high end of the per-job subsidy for projects granted discretionary benefits initiated in fiscal years 2015 and 2016.
$8.9 billion
— The collective amount of conduit debt outstanding in 2016.
$55 million
— The first New Markets Tax Credits allocation received by the New York City Neighborhood Capital Corporation in 2016.
$9.6 million
— The incentive package from the Economic Development Corporation for the relocation of Aetna’s corporate headquarters.
$1,758
— The low end of the per-job subsidy for projects granted discretionary benefits initiated in fiscal years 2015 and 2016.
The federal 'Tax Cuts and Jobs Act' will have substantial impacts on the economy, property values, and tax revenues of New York City and New York State. A special committee of experts has been convened to identify the legislation's highest impact areas and develop options for appropriate state and local government responses.
CBC Breakfast Series NYCED President and CEO James Patchett joined the CBC to discuss the role of NYCEDC during a period of economic growth in New York City.
Tax Increment Financing (TIF) is a tool used to fund infrastructure projects by capturing future property tax revenue, but it carries risks of shifting economic activity rather than creating new growth. To protect taxpayers and ensure projects are truly beneficial, governments should conduct rigorous due diligence and apply strict transparency standards before approving TIF districts.
Recommendations related to Competitiveness
Governments should conduct a "but for" analysis to determine if the development and property value appreciation would occur in the absence of the TIF-funded capital project.
Cities should test their revenue projections against a range of economic scenarios, including the impact of possible cost overruns, revenue shortfalls, cost spillovers, and economic downturns.
Policymakers should evaluate whether a project's expected return on investment is strong enough to justify diverting revenue from other uses.
Governments should implement strong transparency provisions to help protect future taxpayers against the risks associated with TIF projects.
Officials should assess the net value of a project after taking into account the cost of providing public services in the TIF district.
Key Data
$3 billion
— The projected cost of the Hudson Yards project based on the city's planning study.
$359 million
— The amount the City paid from its general fund to subsidize Hudson Yards’ interest payments after the Great Recession delayed office development.
$14 million
— The amount of TIF debt the Troy Downtown Development Authority defaulted on after assessed values of commercial properties fell below pre-TIF baseline levels.
$10 million
— The amount that a majority of Chicago's TIF districts raised and spent over a 13-year period, which failed to generate significant property appreciation.
$75.4 million
— The total outstanding Pilot Increment Financing (PIF) debt in New York as of June 2017.
5 million
— The number of square feet of office vacancies elsewhere in New York City attributed to tenants that relocated to Hudson Yards.
Read original article here . Governor Andrew Cuomo is back in New York after a rare, overnight trip to California, fundraising with Hollywood executives whose industry has benefited from New York's $420 million film tax credit program. "It's a glamorous form of coporate welfare," said Ken Girardin, Empire Center analyst.…
The data points are 348 and 74. 348 is the number of Local Development Corporations and Industrial Development Agencies in NYS. These corporations made $16.2 billion in economic development investments from 2011 through 2015, yet only 5 of the state's 62 counties have had job growth higher than the national…
This weeks data point is 100,000 - the number of “good-paying jobs” the de Blasio administration says it will foster over the next 10 years. Special Guest Alicia Glen, Deputy Mayor for Housing and Economic Development, discusses the news jobs plan, as well as commercial development, affordable housing, and NYC's…
Residents across Bronx community districts provided feedback on various quality of life and service indicators, revealing significant disparities in satisfaction levels regarding city government performance. The survey data highlights specific areas where residents feel the city is failing to meet expectations, including economic growth promotion and public service delivery.
Key Data
40.7%
— Percentage of residents citywide who believe the city promotes economic growth.
34.2%
— Percentage of Bronx residents who believe the city promotes economic growth.
20.9%
— Percentage of residents in Bronx Community District 1 who believe the city promotes economic growth.
46.3%
— Percentage of residents in Bronx Community District 8 who believe the city promotes economic growth.
New York State has tripled its economic development spending under Governor Cuomo, yet nine out of ten regions in the state lagged behind national job growth rates between 2010 and 2016. To improve outcomes, the state should implement a unified budget, standardize performance metrics, and increase transparency regarding the effectiveness of these investments.
Recommendations related to Competitiveness
Establish a Unified Economic Development Budget to better manage state investments.
Use Standardized Metrics to accurately evaluate the performance of economic development programs.
Publish a Database of Deals to provide transparency regarding state economic development spending.
Improve Program Design to ensure that economic development initiatives are effective.
Make Administrative Reforms to improve the oversight and management of economic development projects.
Key Data
$2,768 Million
— Total appropriations for economic development in the '17-'18 fiscal year.
23%
— Growth in total appropriations to Empire State Development from the 2017 adopted budget to the 2018 adopted budget.
$1.4 Billion
— Amount of appropriated funds for Empire State Development dedicated to projects without specific guidelines.
$420 Million
— Annual cost of the Empire State Film Production Tax Credit.
9 out of 10
— Number of regions in New York State that lagged national job growth from 2010 to 2016.
New York City's capital construction process for libraries and cultural institutions is plagued by excessive delays and high costs, with median projects taking over four years to complete and costing significantly more than private-sector developments. These inefficiencies, driven by complex multi-agency oversight and outdated procurement rules, hinder the ability of these vital institutions to serve the public and remain competitive.
Recommendations related to Competitiveness
Create a task force to review and reform the capital construction process.
Start systematically tracking capital project costs and timelines.
Streamline project approval practices and reduce redundancies between OMB and DDC.
Simplify the design review process at DDC.
Strengthen DDC’s data analytics team to inform smarter decision-making.
Institute a process for nonprofits to prequalify for discretionary capital funds.
Establish dependable funding for capital construction projects, including routine state-of-good-repair investments.
Standardize and disseminate capital eligibility rules and requirements.
Allow appropriate capital projects to be contracted through a design-build process.
Expand the use of self-managed projects.
Key Data
$930
— Median cost per square foot for new library and cultural buildings in the sample.
1,550
— Median number of days for a capital project to complete.
144
— Number of DDC-managed capital projects at cultural institutions and libraries analyzed from fiscal years 2010 to 2014.
$1,272
— Average cost per square foot for ground-up construction projects when managed by the city.
$641
— Average cost per square foot for ground-up construction projects when managed by the New York Public Library.
5.3
— Average number of Certificates to Proceed (CP) and CP amendments per project.
New York's economic development tax incentives are the most expensive in the nation, costing $8.25 billion in 2015, yet there is little evidence that these programs effectively drive economic growth or job creation. To improve fiscal responsibility and program effectiveness, the state should implement a moratorium on new spending while adopting standardized metrics, unified budgeting, and greater transparency for incentive recipients.
Recommendations related to Competitiveness
The State should implement a moratorium on new economic development spending until it increases transparency, establishes performance criteria, and enforces accountability.
New York should establish a unified economic development budget that captures both state and local costs.
The State should use standardized metrics across all economic development initiatives to ensure effectiveness.
New York should publish a database of deals to provide transparency regarding the recipients of incentives.
The State should improve program design to follow best practices and reward actual performance.
The State should make administrative reforms to procurement and oversight rules.
Key Data
$8.25 billion
— The amount New York awarded in economic development incentives in 2015.
2.5 times
— The factor by which New York's incentive use exceeds the national average.
$45 billion
— The estimated cost to taxpayers for state and local economic development tax incentives nationwide in 2015.
New York City's projected revenue from taxi medallion sales is increasingly unrealistic as ride-sharing services have surged, causing yellow taxi trips and medallion values to plummet. The city should remove these projected revenues from its financial plan until the industry stabilizes and a more accurate valuation can be determined.
Recommendations related to Competitiveness
The City should adjust its budget assumptions to reflect increased competition from ride-sharing services, with the most prudent action being removing this revenue from its financial plan until the industry stabilizes.
Trends in the industry suggest the City should, at a minimum, adjust its assumptions for how much can be earned from future sales.
A more prudent action is to remove the revenue from the financial plan until a more stable and realistic basis can be identified for the value of any future auctions.
Key Data
$1.2 billion
— Expected revenue from taxi medallion sales during fiscal years 2019 to 2023.
$359 million
— Revenue generated from the auction of 350 medallions during fiscal year 2014.
$864,000
— Average winning bid for an individual medallion during the 2014 auctions.
$1.1 million
— Average winning bid for a corporate medallion during the 2014 auctions.
$480,000
— Average price of independent medallions in 2016 private transfers.
$600,000
— Average price of corporate medallions in 2016 private transfers.
An interactive tool features employment and wage data for New York State's regional economies from 2010 to 2015. This resource allows users to explore county-level economic performance trends across the state.
Regional Economic Development Councils have largely failed to outperform national and neighboring state job growth benchmarks despite receiving nearly $4 billion in tax breaks and grants. To improve economic outcomes, the state should shift focus from specific project subsidies toward broad regulatory and tax reform, infrastructure investment, and enhanced career and technical education.
Recommendations related to Competitiveness
The REDCs should reassess their strategic plans and revise them with an eye toward investing in business sectors that are more likely to spur growth.
New York should pursue regulatory and tax reform to improve economic development results rather than aiding specific businesses or projects.
The state should prioritize enhanced career and technical education to benefit employers throughout the region or state.
The state should focus on infrastructure investment that benefits employers throughout the region or state.
Key Data
$4 Billion
— Total tax breaks and grants awarded through the Regional Economic Development Councils to date.
7.9 percent
— Total employment growth in New York State between 2010 and 2015.
9.1 percent
— National employment growth rate between 2010 and 2015.
5.2 percent
— Employment growth rate of neighboring states between 2010 and 2015.
$120,400
— Average pay for technology sector jobs statewide.
$65,000
— Statewide average pay for the manufacturing sector.
A Panel Discussion CBC Vice President Maria Doulis presented findings of CBC's Competitiveness Scorecard, which assesses the New York City metro area's competitiveness in attracting talent. The presentation was followed by a panel discussion on ways NYC can improve its competitive edge.
New York City faces increasing competition from other metropolitan areas, with its ranking for attracting young and highly educated individuals slipping to 10th and 13th place respectively since 2013. To remain a top destination for talent, the city must implement an economic development strategy that prioritizes human capital and improves quality of life factors like housing affordability and commute times.
Recommendations related to Competitiveness
To maintain a competitive position, New York City must have an economic development strategy that focuses on human capital and addresses weaknesses in quality of life.
Key Data
10th
— New York City metro's rank in the percent increase of young and highly educated individuals.
13th
— New York City metro's rank in the percent increase of highly educated individuals.
14
— Number of the largest domestic metro areas against which the New York City metro area was assessed.
New York City's paratransit program, Access-A-Ride, is the most expensive in the nation due to high utilization and low productivity, with costs projected to reach $621 million by 2020. To improve efficiency and reduce the financial burden on the transit system, the program should shift ambulatory trips to lower-cost broker car services, implement taxicab and for-hire vehicle subsidies, and adopt a full-service brokerage model.
Recommendations related to Competitiveness
The MTA could shift ambulatory trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries, potentially saving up to $126 million annually.
The MTA could provide service more efficiently and improve the customer experience by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies (TNC) like Uber and Lyft, which could save up to $28 million annually if implemented for trips in the Manhattan hail zone.
By altering its service design and contracting a single, full-service broker, the MTA could consolidate the multiple management layers, which could save up to $30 million annually if the MTA matches the performance of other systems.
Doubling the fare could save as much as $184 million annually by reducing trips and increasing fare revenue.
If the program were redesigned to limit fraud and encourage wider use of the fixed-route system by paratransit customers and reduce trips 5 percent, the program could save $22 million annually.
Increasing the share of trip requests met with an offer of feeder service to 5 percent could save up to $20 million annually.
Changing the policy of reimbursing the MTA only the relevant public transit fare for Medicaid-eligible trips could generate an estimated $14 million annually for the MTA.
Key Data
$461 million
— 2015 cost of the Access-A-Ride program.
$71
— 2014 cost per trip for New York's paratransit program, the highest among 29 cities.
17
— Number of people registered to use the service per 1,000 residents in New York.
$621 million
— Projected total program expenses in 2020.
$385 million
— Amount of MTA revenue used to subsidize AAR in 2020.
1.23
— AAR's productivity in trips per revenue hour in 2014.
The Metropolitan Transportation Authority is vital to the regional economy and job market, yet it faces significant revenue challenges and capital funding needs. Mandating additional free transfers would reduce the agency's annual revenue by $40 million, hindering its ability to finance $500 million in essential capital investments.
Recommendations related to Competitiveness
Governor Cuomo should veto S3228/A2607, a bill mandating an increase from one to two free transfers for persons purchasing a ride on Metropolitan Transportation Authority subways and buses.
The state should avoid depriving the MTA of fare revenue that can support debt service for $500 million in much needed capital investments.
Key Data
$40 million
— The estimated annual reduction in MTA revenue if the bill mandating additional free transfers is enacted.
$1.21
— The average fare revenue per ride on the MTA in 1993.
$2.05
— The inflation-adjusted equivalent of the 1993 average fare revenue per ride in 2014.
20 percent
— The amount by which the inflation-adjusted 1993 fare was higher than the actual 2014 average revenue per ride.
$1.70
— The actual average revenue per ride on the MTA in 2014.
$500 million
— The amount of capital investments that the MTA needs to support through debt service.
New York's economic development programs have grown in cost to $8.1 billion, yet they lack the necessary transparency and standardized metrics to determine if they provide a worthwhile return on investment. To improve cost-effectiveness, the state must coordinate investments with regional strategies, standardize performance metrics, and implement comprehensive disclosure requirements.
Recommendations related to Competitiveness
All investments should be coordinated and aligned to regional strategies to improve the cost-effectiveness of economic development.
Performance metrics should be standardized for all programs and across all regions to ensure consistent evaluation.
More comprehensive disclosure requirements should be put in place so that the costs and benefits of each project can be weighed.
Increased accountability, greater transparency, and more rigorous evaluation are needed to ensure a return on investment that taxpayers can value.
Key Data
$1.5 billion
— The amount proposed for the 'Upstate Revitalization' competition among seven upstate regions.
$7.0 billion
— The cost of New York's economic development programs in 2010.
$8.1 billion
— The cost of New York's economic development programs in 2014.
The Port of New York and New Jersey faces persistent financial deficits, with projected annual losses reaching $107 million by 2029, despite its status as the largest port on the Eastern Seaboard. To improve fiscal sustainability and regional competitiveness, the port should right-size its capacity by closing underperforming facilities and support more productive terminal operations through labor contract reforms.
Recommendations related to Competitiveness
The Port Authority should "rightsize" port capacity by closing obsolete and underperforming facilities that are not needed to meet likely future demand.
The Port Authority should increase revenue opportunities by supporting more competitive and productive terminal operations.
The Port Authority should support changes to collective bargaining agreements between shipping firms and labor unions to lower costs driven by inefficient staffing arrangements.
The Port Authority should lower container royalties paid by shippers to the workers' union to improve the port's regional competitiveness.
The Port Authority should inject competition into the process when revisiting terminal leases by recruiting other terminal operators from around the world or introducing direct operation at one facility.
Key Data
$107 million
— Projected annual deficit for Port Commerce in 2029.
$82 million
— Total loss generated by Port Commerce in 2013.
$354 million
— Estimated amount paid by carriers in container royalties for New York-New Jersey terminals in 2013.
$300 million
— Potential cost savings from the elimination of cash payments and port-specific assessments.
18 percent
— Potential cost reduction by reducing the total number of gang members to better utilize skilled workers.
13.9 percent
— The port's share of all U.S. container trade in 2013.
New York City's high housing costs are offset by relatively low transportation expenses and high incomes, which bolster the city's overall economic competitiveness. By prioritizing the fiscal health of transit agencies and increasing density in transit corridors, the city can maintain this affordability advantage.
Recommendations related to Competitiveness
Municipal leaders should be concerned with the fiscal health and administration of New York City’s major transit agencies—the Metropolitan Transportation Authority, the state and city transportation departments, and the Port Authority of New York and New Jersey.
Increasing density in transit corridors is a sensible approach to development and an important component of the Mayor’s affordable housing plan.
Key Data
$63,915
— Annual income for a typical household in New York City.
$14,700
— Annual housing costs for a typical household in New York City.
$5,752
— Annual transportation costs for a typical household in New York City.
$20,452
— Combined housing and transportation costs for a typical household in New York City.
56.5 percent
— Households in New York City that do not own a car.
55.9 percent
— Commuters in New York City who use public transit to get to work.
New York City's waste management system is significantly more expensive and less efficient than private sector alternatives and public agencies in other major cities, largely due to rigid union-contracted work rules and a lack of modern technology. Implementing reforms such as pay-as-you-throw pricing, automated collection technology, and franchise agreements for private carters could improve efficiency and reduce the high costs currently borne by taxpayers.
Recommendations related to Competitiveness
New York City should implement PAYT for its residential service, while devising a plan to avoid increasing the overall tax burden, such as household rebates or a property tax rate reduction.
The City should consider limiting the number of private waste carters through exclusive or non-exclusive franchise agreements to reduce truck traffic and emissions.
DSNY should explore more extensive use of dumpsters and similar technology to improve collection efficiency and reduce worker injuries.
The City should utilize its list of pre-authorized private contractors as a building block for a more efficient system for snow removal.
The City should consider commingled recycling collection in some areas of the city, particularly those with low diversion rates, to improve economic efficiency.
Key Data
$2.3 billion
— Total annual local spending on residential and commercial garbage in New York City.
$431 per ton
— DSNY's average combined collection and disposal cost per ton.
$185 per ton
— Average combined collection and disposal cost per ton for private carters.
$150,000
— Average annual compensation cost of a City sanitation worker.
$251 per ton
— DSNY's collection cost per ton of refuse in fiscal year 2012.
$100,000
— Starting compensation cost of a City sanitation worker.
The Port Authority Trans-Hudson (PATH) rail system faces growing annual deficits, projected to reach $487 million by 2018, necessitating a shift from its current reliance on bridge and tunnel toll cross-subsidies to a more sustainable model involving fare increases and tax subsidies. Implementing a new financing structure, such as a "50-25-25" or "equal shares" model, would improve fiscal viability and potentially allow for the transfer of operations to New Jersey Transit to enhance regional coordination and economic competitiveness.
Recommendations related to Competitiveness
The Port Authority should adopt a consistent funding structure that shares the cost of operating the transit system among all who benefit, specifically utilizing a "50-25-25" or "equal shares" model.
Consideration should be given to altering PATH's governance to facilitate the collection of a tax subsidy and improve coordination with other bi-state transit operations.
PATH operations could be transferred from PANYNJ to NJT, a New Jersey public transit agency, to place the fleets serving the large majority of commuters under unified management.
The agency should implement fare increases beyond those currently planned to better align revenue with the actual cost of service.
The agency should implement a tax subsidy—such as a sales or property tax in the five counties with the most PATH use—to cover a share of the cost of services.
Key Data
$487 million
— Projected annual deficit for the PATH system in 2018.
$3.9 billion
— Estimated cost of the new World Trade Center PATH terminal and related amenities.
$2.2 billion
— Estimated total value of damage to PANYNJ facilities from Superstorm Sandy.
$1.5 billion
— Expected cost of the project to extend PATH to Newark Liberty International Airport.
$1.2 billion
— Annual amount of state taxes and federal grants supporting New Jersey Transit.
$387 million
— Projected annual deficit for the PATH system in 2014.
New York City spends nearly $3 billion annually on economic development, yet many business incentives and tax expenditures require reform to ensure they are cost-effective and transparent. The city should prioritize investments that enhance neighborhood infrastructure and growth potential rather than subsidizing individual firms that do not require assistance to succeed.
Recommendations related to Competitiveness
Some reforms in this area have taken place, but more should be done to reduce the length of benefits provided and exclude projects that clearly will be profitable without subsidies—like many in the central business district.
The city should also be monitoring these deals more closely and structuring them to provide benefits after firms provide proof they have met their job creation promises.
The goal should be to narrow these investments to those that enhance infrastructure in neighborhoods with growth potential; for example, city infrastructure upgrades in Hunts Point fostered business growth that solidified the area's role as a food distribution hub.
The Mayor should clean out the city's toolbox to decide which tools are best in fostering economic growth.
Key Data
$3 billion
— Annual spending by New York City to cultivate industries, attract and keep businesses, and stimulate development.
New York City's economic development programs, which include tax expenditures, capital spending, and conduit financing, have grown significantly, with annual tax expenditures reaching $1.6 billion and capital spending rising to $751 million by 2012. While these programs have supported job growth in specific sectors, the city needs to improve the cost-effectiveness of tax incentives, establish clearer standards for discretionary benefits, and enhance the transparency of economic development agencies.
Recommendations related to Competitiveness
The next administration should use capital investments to enhance infrastructure in neighborhoods with job growth potential to spur and augment private investment.
The city should encourage growth in the cultural, medical and educational sectors by enhancing access to capital through conduit financing rather than relying on direct capital grants.
The city must continue reform of as-of-right tax expenditure programs to make them more cost-effective by implementing greater restrictions on retail benefits and shorter durations.
The city should establish clearer standards for awarding discretionary tax expenditure benefits to reduce the wide variation in the level of support firms receive.
The city should continue rezoning and expand special mixed use districts to facilitate diversified job growth in areas currently limited to industrial use.
The city should better manage the Economic Development Corporation by focusing on job creation and enhancing transparency in its administration of benefit programs.
Key Data
$1.6 billion
— Annual tax expenditures in 2012.
$751 million
— Annual capital spending in 2012.
$9.7 billion
— Total conduit debt outstanding.
$368 million
— Relevant operating expenditures in 2012.
$9.2 billion
— Total face value of 226 bond issues for conduit financing between 2002 and 2012.
$265.3 million
— Net value of annual real estate tax benefits in 2012.
New York City's tax burden is significantly higher than in other large cities, with personal income and commercial property taxes acting as major outliers that potentially threaten the city's economic competitiveness. Policymakers should exercise caution when considering further tax increases, as the city's already high rates and the ease of intraregional migration create significant uncertainty regarding the potential for tax-induced outmigration.
Recommendations related to Competitiveness
The policy implication is that these conditions regarding the high commercial property tax should be considered in any initiatives to raise more revenue from the property tax.
Policymakers considering raising the personal income tax or the commercial property tax need to be aware that both taxes are already significantly higher than in other large cities.
Policymakers would be well advised to examine options where New York City is not as far out of line with other cities regarding tax rates.
Key Data
46 percent
— New York City's state and local taxes were 46 percent higher than the average for other large cities.
90 percent
— New York City's local taxes were 90 percent higher than the average for other large cities.
51 percent
— New York City's commercial property tax was 51 percent higher than the average for the other 14 of the 15 largest cities.
162 percent
— New York City's commercial property tax was 162 percent higher than in Hoboken.
3.9 percent
— The effective rate of the commercial rent tax is 3.9 percent of gross rent for properties with gross rent of more than $300,000 annually.
New York City remains highly competitive in attracting educated individuals due to its robust employment opportunities and cultural assets, yet it faces stiff competition from other major metropolitan areas. To maintain its economic edge, the city must address critical weaknesses by improving its transportation network, lowering housing costs, and better preparing the local workforce for future job demands.
Recommendations related to Competitiveness
The city should support higher education in fields where it lacks depth to ensure a skilled workforce.
The city must train New Yorkers for the jobs of tomorrow to maintain economic growth.
The city needs to improve the transportation network to address current weaknesses.
The city should stimulate transit-oriented development to enhance its attractiveness.
The next mayor must keep the city a safe, attractive and affordable place to study, live and work to ensure continued prosperity.
Key Data
14
— Total number of large metro areas analyzed for talent attraction.
11
— Number of large metro areas attracting highly educated workers at a faster pace than New York City.
9th
— New York City's ranking for high housing costs among large metro areas.
14th
— New York City's ranking for lengthy commutes among large metro areas.
New York City faces stiff competition from domestic hubs like Silicon Valley and Washington, D.C., which are outpacing the city in attracting highly educated talent and fostering business creation. To maintain its economic lead, the city must prioritize policies that support emerging industries, improve mass transit, and reform immigration laws to retain skilled workers.
Recommendations related to Competitiveness
New York City should prioritize supporting higher education and training in emerging industries to ensure the city's appeal to mobile talent.
The city should focus on expanding the entrepreneurship fund and other support services for tech companies to foster business growth.
Policymakers should prioritize stimulating development and improving mass transit to enhance the city's competitive advantage.
The city should advocate for reforming immigration laws to retain foreign talent, as highly educated individuals are increasingly mobile.
Key Data
120
— New York City ranked first among 120 global cities based on its ability to attract capital, businesses, and talent.
14
— The competitiveness scorecard examines the New York City metropolitan area relative to 14 large domestic metro areas.
6
— Six U.S. metropolitan areas have higher rates of business creation than the New York City metropolitan area.
three times
— Silicon Valley has had more than three times the number of IPOs than the New York City metropolitan area in the last 15 years.
New York City faces stiff competition from other U.S. regions in attracting highly educated workers and fostering business creation, particularly due to challenges with rent affordability and commute times. To maintain its economic leadership, the city must implement policies that improve infrastructure, housing, and educational opportunities in specialized fields.
Recommendations related to Competitiveness
The city should support education in fields where the metro area lacks depth to enhance competitiveness.
Policymakers should foster affordable workspaces for startups to encourage business growth.
The city must improve broadband and Wi-Fi connectivity to remain competitive in the information economy.
The government should advocate for visa protocols that allow foreign students to work and become residents to retain talent.
The city needs to improve mass transit to enhance its attractiveness as a place to live and work.
The city should stimulate housing development to address quality-of-life concerns.
Key Data
14
— Number of other largest U.S. metro areas compared in the competitiveness scorecard.
6
— Number of metro areas with higher rates of business creation than New York.
2
— Multiplier representing the number of people with master's degrees in New York compared to Los Angeles.
A Panel Discussion This expert panel discussed the findings of the 2013 Competitiveness scorecard, which assessed the New York City metropolitan area’s competitiveness in attracting, cultivating and retaining talent.
New York City remains a highly competitive destination for human capital, dominating in demographics and higher education, but it faces significant challenges in entrepreneurship, housing costs, and commute times. To maintain its economic prosperity, the city must actively pursue policies to foster emerging industries and improve quality of life rather than relying on past success.
Recommendations related to Competitiveness
To maintain a competitive position, the city must pursue policies to expand human capital development.
To maintain a competitive position, the city must pursue policies to foster emerging industries.
To maintain a competitive position, the city must pursue policies to address weaknesses in quality of life.
Key Data
1
— New York City's rank for the number of young and highly educated individuals among the 14 largest domestic metro areas.
14
— New York City's rank for commute times, indicating it has the longest commute among the 14 largest domestic metro areas.
14
— New York City's rank for the percent change in the number of highly educated individuals, indicating it lags behind other metro areas.
14
— The number of largest domestic metro areas used for the comparative scorecard analysis.
The MTA's current financing is volatile and insufficient, leading to recurring deficits and inadequate capital investment that threatens the region's economic competitiveness. A "25-50-25" funding formula is proposed, where bridge and tunnel tolls, transit fares, and tax subsidies are rebalanced to ensure fiscal stability and support necessary infrastructure repairs.
Recommendations related to Competitiveness
The cost of bridge and tunnel facilities should be funded entirely through user fees paid by motorists.
User fees paid by motorists should also generate a surplus large enough to cover approximately one-quarter of the cost of providing mass transit services.
Mass transit users should pay fares sufficient to cover approximately one-half the operating cost of those services.
State and local tax subsidies to mass transit should cover at least one-quarter of the operating cost of those services and fund “catch-up” capital investments needed to bring the system to a state of good repair.
The MTA should stop running large deficits and lower its future debt burden by funding regular replacement needs with operating revenues rather than borrowing.
Key Data
$17.1 billion
— The annual operating and financing expenditures of the MTA’s agencies budgeted for 2012.
$2.6 billion
— The amount of additional annual revenue the 25-50-25 policy would provide by 2016 without new taxes.
$32 billion
— The amount of MTA debt outstanding in 2011.
$39 billion
— The projected amount of MTA debt outstanding in 2015.
$17.8 billion
— The cumulative unfunded OPEB liability as of the end of 2011.
53%
— The MTA system-wide farebox operating ratio in 2010.
New York's pension plans for uniformed personnel remain generous compared to other states, even under the proposed Tier VI reforms. These reforms do not force police and firefighters to work until age 65, as they retain the ability to retire with full benefits after 20 or 22 years of service.
Key Data
12
— Number of states that made changes to retirement benefits for uniformed personnel between 2010 and 2011.
22
— Years of service required for newly hired New York City Police Officers and Firefighters to be eligible to retire.
20
— Years of service required for '20 and out' provisions for future State and local members of the New York State Police and Fire Retirement System.
62 to 65
— Increase in the age at which members who leave for reasons other than retirement or death can claim a partial pension benefit.
New York State should pause additional funding for regional economic development competitions until the current fragmented system of agencies is consolidated and accountability is improved. The state needs to implement standardized performance metrics and a Unified Economic Development Budget to ensure that the billions spent annually on subsidies and tax expenditures actually produce measurable results.
Recommendations related to Competitiveness
Do not authorize additional funds for another round of regional competition until the "hydra" of economic development is tamed.
Improve the accountability and transparency of all expenditures in this area to ensure that grants and preexisting programs are a success.
Bring the apparatus of economic development in the State together under a management structure that works to make the most efficient and effective types of investments.
Apply standardized performance measures to all regions to allow for accurate comparisons and the aggregation of data to measure statewide results.
Implement a Unified Economic Development Budget to provide full disclosure of the costs and benefits of every investment.
Key Data
$6.6 billion
— Annual state and local investment in direct subsidies and tax expenditures for economic development.
6.5:1
— Leveraging ratio of public to private capital included in the North Country's regional plan.
5:1
— Leveraging ratio of public to private capital included in the Capital Region's regional plan.
28:1
— Leveraging ratio of public to private capital included in the Central New York regional plan.
$783 million
— Amount of funding just awarded through the regional economic development competition.
New York's high public employee pension costs place the state at a significant competitive disadvantage, with employer contributions consuming a disproportionate share of state and local spending compared to the national average. Implementing the proposed "Tier VI" pension reform, which includes higher employee contributions and a higher retirement age, is essential to align the state with national norms and contain future costs.
Recommendations related to Competitiveness
The Legislature should adopt the 'Tier VI' pension reform plan in a timely manner.
The Governor should include the 'Tier VI' plan in the Executive Budget.
The state should extend the optional defined contribution plan to other groups of employees to draw those looking for more portable retirement benefits.
The state should implement the proposed limits on Final Average Salary (FAS) calculations to exclude overtime and cap annual amounts.
The state should increase the retirement age to 65 for new workers to align with national trends.
Key Data
$574
— Combined state and local pension cost per capita in New York, which is more than twice the national average.
$12
— Pension cost per $1,000 of personal income in New York, which is more than 70 percent above the national average.
4.1 percent
— Employer contributions to pension funds as a share of total state and local spending in New York, compared to 2.9 percent in the nation as a whole.
$123 billion
— Total estimated savings from the proposed Tier VI pension reforms over 30 years.
$93 billion
— Estimated savings for New York State and local governments from Tier VI changes over 30 years.
$30 billion
— Estimated savings for New York City pension systems from Tier VI changes over 30 years.
New York City lags behind other major metropolitan areas in engineering talent, with only 0.7% of its population working as engineers compared to 3.1% in the San Jose metro area. Establishing an applied science and engineering campus in New York City could serve as a critical step toward increasing the local engineering talent pool and improving the region's competitive standing.
Recommendations related to Competitiveness
An applied science and engineering campus would be a positive first step in reversing the trend of losing highly-skilled engineering talent.
Key Data
$100 Million
— Value of land and infrastructure investments the City of New York will provide to the winner of the applied science and engineering campus selection.
129,000
— Number of engineers in the New York City metropolitan area according to the 2008-2010 American Community Survey.
.7%
— Share of the New York City metropolitan area population citing an occupation as an engineer.
3.1%
— Share of the San Jose metropolitan area population citing an occupation as an engineer.
450,000
— Number of additional engineers the New York City metropolitan area would need to surpass the San Jose metropolitan area's share.
New York's recent tax agreement, while increasing the state's reliance on high earners and reducing competitiveness, offers long-term benefits through infrastructure and pension reforms. To maintain fiscal responsibility, the state must limit budget growth to 2 percent and implement structural changes like design-build procurement and pension adjustments.
Recommendations related to Competitiveness
New York should create a Commission to re-examine New York’s tax structure.
The state should authorize design-build procurement practices for infrastructure projects.
New York should allow destination gambling to return jobs and revenues to the state.
Next year’s budget should not be allowed to grow more than 2 percent.
The state should reform the state and local pension system along the lines of the Governor’s “Tier 6” proposal.
Key Data
$1.9 billion
— net gain in annual revenue over letting the “millionaire tax” expire.
12.7 percent
— state and local income tax rate for high earners in New York City, which is higher than anywhere else in the nation.
$120 billion
— projected savings over the next 30 years from pension reforms like the Governor’s “Tier 6” proposal.
2 percent
— limit for the growth of next year’s budget.
Corporation Counsel Michael A. Cardozo discusses legal and financial issues affecting New York City and outlines key legal initiatives critical to the City's continued economic health, including highlighting glaring fixes needed to reform state tort laws.
New York's economic development landscape is fragmented, with approximately $6.6 billion spent annually across hundreds of entities that often lack coordination and measurable goals. To improve competitiveness and ensure accountability, the state should consolidate authority over these resources, implement performance-based funding, and establish a unified budget to track all costs and benefits.
Recommendations related to Competitiveness
To be fully effective, the councils should have responsibility and authority over all state economic development resources, not just a subset of selected programs.
The councils should be authorized to allocate power awards in concert with other types of grants.
As ESD helps the new councils draw up their metrics it should make sure that consistent performance measures and standard benchmarks are used in every regional plan.
Benefits should be paid retroactively based on firm performance.
The ultimate goal should be the creation of a Unified Economic Development Budget.
Funds for the expansion of regional council investments should be generated by reducing or eliminating current programs that are deemed unsuccessful after a thorough review.
Key Data
$6.6 billion
— Annual cost to the State of all economic development programs in tax breaks and direct expenditures.
$2.5 billion
— Annual reduction in state tax receipts caused by more than a dozen separate state tax credit programs.
$1.8 billion
— Annual spending by seven state public authorities and six state agencies on capital investments and debt service.
$1.3 billion
— Annual investment in economic development made by municipalities.
$1.0 billion
— Annual tax breaks provided by Industrial Development Agencies and the City of New York.
$554 million
— Cost of the Empire Zone program in lost tax receipts in 2010.
New York's public university system suffers from a lack of flagship schools and erratic tuition policies caused by legislative control, which keeps tuition rates artificially low compared to national averages. Granting universities greater autonomy to set differential tuition and manage assets would improve the system's competitiveness and financial stability while requiring a strengthening of financial aid programs to maintain accessibility.
Recommendations related to Competitiveness
All public higher education institutions in New York should be granted the same authority regarding tuition policies and control over physical assets as is being proposed for SUNY at Buffalo.
The state should allow universities to raise tuition without legislative approval to ensure more regular, modest, and predictable tuition adjustments.
It is desirable to allow SUNY and CUNY to set differential tuition among campuses and programs to recognize variation in costs and maximize revenue.
State leaders should reverse the trend of reducing financial aid through the Tuition Assistance Program to ensure affordability for low-income students.
Key Data
$5,790
— Average tuition and fees for resident undergraduate students at New York's four-year public colleges and universities in 2010-11.
$7,605
— National average tuition and fees for resident undergraduate students in 2010-11.
$1,252
— Amount by which New York’s in-state tuition and fees at community colleges in 2010-11 exceeded the national average.
$12,870
— SUNY's out-of-state undergraduate tuition in 2009-10.
New York City must avoid tax increases that threaten its long-term economic competitiveness while implementing structural reforms to public employee benefits and downsizing the capital program to manage debt. These measures are essential to ensure fiscal stability and position the city to better withstand future economic downturns.
Recommendations related to Competitiveness
The Council should support the Mayor’s efforts to bargain with municipal labor unions for contributions to health insurance premiums to improve the City's fiscal competitiveness.
The Council should support reforming the pension package for new employees to ensure long-term fiscal sustainability and competitiveness.
The City should downsize the capital program to lower debt service costs and maintain fiscal health.
The Council should reject the depletion of the retiree health insurance trust fund to preserve funds for their original purpose.
The City should lobby the State Legislature for pension reform to align benefits with private sector realities.
Key Data
$1.3 billion
— Recurring expenditure savings included in the budget to address financial realities.
$1 billion
— Potential annual savings from requiring employee contributions of 10 percent for individual coverage, 25 percent for dependents, and 50 percent for retirees.
$65 billion
— Accrued future liability associated with retiree health benefits.
$13.4 billion
— Record high capital commitments for the current year.
815 percent
— Growth in pension costs between fiscal years 2000 and 2009.
$3.8 billion
— The projected deficit in fiscal year 2012.
New York's economic development programs, specifically the Empire Zone and Power for Jobs initiatives, have proven ineffective and costly, necessitating their replacement with more modern, performance-based strategies. By shifting away from these opaque, poorly measured programs toward targeted investments in high-growth sectors, the state can better address its high energy costs and improve its overall economic competitiveness.
Recommendations related to Competitiveness
The Empire Zone and Power for Jobs programs should be replaced without further delay to improve economic competitiveness.
The state should replace the Empire Zone program with the Excelsior program, which would attract firms in high-technology, manufacturing and financial services that agree to add at least 50 jobs.
New legislation for economic development programs should include greater provisions for environmental audits to help firms identify areas where they can conserve energy.
Both replacement programs should be fit into a larger economic development strategy that identifies overarching goals and includes metrics for assessing performance.
All tax credits for new economic development programs should be awarded based on a standard application and doled out retroactively, based on the prior year's performance.
Key Data
$30 million
— The cost of the Empire Zone program in 2000.
$600 million
— The cost of the Empire Zone program in 2009.
$479 million
— The lower bound estimate of the annual cost of Power for Jobs programs.
$640 million
— The upper bound estimate of the annual cost of Power for Jobs programs.
$100 million
— The amount of direct aid provided to residential consumers affected by changes to power contracts.
50 jobs
— The minimum number of jobs firms must agree to add to qualify for the Excelsior program.
New York's public sector retirement benefits are significantly more generous than those provided by private employers and other public systems, creating an unnecessary fiscal burden for taxpayers. The report argues for a major overhaul of these benefits, including a shift to defined contribution plans and stricter eligibility standards, to align public sector compensation with market norms.
Recommendations related to Competitiveness
The City and State should convert from defined benefit to defined contribution plans as the long-run goal for pension reform.
New York systems should increase required employee contributions and not limit them to ten years.
The City and State should raise the minimum age requirement for retirement to reflect increased life spans.
Pension benefits should be based on a more standard definition of final average salary that excludes overtime and other supplements.
The City and State should define work-related disabilities more rigorously to prevent broad access without clear evidence of a work-related cause.
The City should eliminate the variable supplements available to some retired New York City uniformed workers.
The City and State should require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
The City and State should stop reimbursing retirees for Medicare Part B premiums to align with practices of other large employers.
Key Data
$35.16
— Total compensation costs per hour among public employers in 2004.
$23.90
— Total private sector compensation per hour in 2004.
47%
— Amount by which public sector compensation costs exceeded private sector compensation in 2004.
$1.5 billion
— Combined cost to the City and State for health insurance for retirees in 2004.
$12,000
— Amount of annual variable supplement payments for some retired New York City uniformed workers by 2007.
43%
— Percentage of retired firefighters receiving additional benefits due to a disability deemed to be job related.
New York's economic development programs, which provide discounted power to businesses, are currently ineffective and lack transparency, failing to support the state's long-term energy and economic goals. To improve competitiveness, the state should phase out these programs, integrate assistance into a comprehensive economic strategy, and sell power at market rates to fund infrastructure improvements.
Recommendations related to Competitiveness
New York should phase out current economic development power programs and allow existing contracts to expire without renewal.
State leaders should include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
New York should sell power no longer used for economic development at market rates to generate additional revenue for the state.
The state should link energy conservation and economic development goals by requiring firms receiving benefits to submit to energy audits and comply with best practices.
Key Data
$479 million to $640 million
— Estimated annual revenue loss and costs associated with NYPA's economic development programs.
453,914
— Total number of jobs committed by firms participating in NYPA's economic development programs.
1,806,820
— Total kilowatts of power allocated to businesses through NYPA's economic development programs.
$247 to $7,883
— Range of per-job subsidy costs across the various economic development programs.
The Empire Zones program, criticized as an ineffective and costly investment, should be allowed to sunset in favor of the proposed Excelsior program to establish a more sound economic development strategy. This transition would replace outdated policies with a framework that targets economically important industries and ties benefits to actual private sector investment.
Recommendations related to Competitiveness
The State Legislature should allow the Empire Zones program to sunset as of June 30, 2010, as established by law.
The State Legislature should enact the Excelsior program as proposed by the Governor to establish a sound economic development strategy.
The State Legislature should reject provisions that would extend local Empire Zone administration boards and wage credits, as policies that have proven ineffective should not be continued.
New York's Empire Zone program has failed to meet its economic development goals, instead becoming a costly vehicle for tax breaks that often benefit large corporations rather than distressed communities. The program should be eliminated to better allocate scarce public resources toward initiatives that actually foster economic growth and competitiveness.
Recommendations related to Competitiveness
The time has come to end the Empire Zone program.
Increasingly scarce public resources should no longer be spent in this unproductive way.
The Empire Zone program should be a prime target for elimination.
Key Data
$582 million
— The cost of the Empire Zone program in 2008, representing a twenty-fold increase from 2000.
$900 million
— The amount of unused tax credits firms have that can be used in future years.
$514 million
— The total amount of tax credits claimed by firms in 2006.
$391 million
— The amount of tax credits claimed by just 500 firms in 2006, representing 76 percent of the total.
$127 million
— The amount of tax credits that went to Fortune 1000 firms in 2006, or about 25 percent of total annual claims.
$2.1 million
— The value of tax credits denied to seven companies after the Tax and Finance Department audited 100 tax returns.
New York City's municipal employee benefit costs, totaling $10.4 billion annually, are significantly higher than those in the private sector and threaten the city's ability to remain a competitive environment for business. Aligning these benefits with private-sector standards through employee contributions and defined-contribution plans could save taxpayers nearly $1.4 billion annually.
Recommendations related to Competitiveness
The city should require its current workers to make contributions toward health-insurance premiums equal to the amounts paid by employees of local private-sector firms to save taxpayers about $628 million a year.
The city should require retirees to make contributions toward health-insurance premiums to achieve annual savings of $741 million.
The city should convert to defined-contribution plans for future hires to remain a competitive place for private-sector employers to do business.
Key Data
$10.4 billion
— Total annual cost for pension and health-insurance benefits for current and retired municipal employees.
$1.4 billion
— Potential annual savings for taxpayers if the city offered benefits similar to those in the private sector.
$628 million
— Annual savings from requiring current workers to make contributions toward health-insurance premiums.
$741 million
— Annual savings from requiring retirees to make contributions toward health-insurance premiums.
8%
— Percentage of surveyed private firms that do not require payments toward health insurance premiums from their workers.
90%
— Percentage of surveyed private firms that offer defined-contribution pension plans.
The Empire Zone program has failed to meet its economic goals, with costs ballooning from $30 million to $580 million between 2000 and 2008 while most participating firms failed to meet their job or investment targets. Future economic development initiatives should be replaced with programs that are performance-based, consolidated under centralized management, and aligned with a clear strategy to attract growth industries.
Recommendations related to Competitiveness
New programs should be aligned with a clear and overarching economic development strategy for New York State that articulates goals, objectives, and the metrics needed to measure performance.
Reporting and disclosure of cost-benefit calculations for all economic development subsidies should be improved.
Newly focused efforts should be targeted toward growth industries (such as the development and manufacturing of new technologies).
Subsidies aimed at retention in manufacturing and other sectors should be clearly delineated and paired with appropriate measurements of their success or failure.
Firms should be held accountable by basing program payments on performance post-facto rather than on projections made upon approval.
Program management should be consolidated under a statewide or regional board structure to improve outcomes and standardize practices.
Key Data
$580 million
— The cost of the Empire Zone program in 2008.
45 percent
— The average annual growth rate of the program's cost from 2000 to 2008.
$2,200
— The median benefits per job for program participants.
$690,000
— The amount Manhattan Nursing Home Realty received in 2006 for adding a single job.
58 percent
— The percentage of firms in the program that fell short of either their job or investment targets by more than 60 percent.
79 percent
— The percentage of the 570 Empire Zone beneficiaries in New York City that failed to meet their targets.
To maintain its competitiveness and avoid the service cuts of the 1970s, New York City must control its municipal payroll, which saw compensation costs rise by $15 billion or 80 percent between 2000 and 2009. By limiting wage growth, reforming benefits, and reducing the debt burden that is projected to consume 9 percent of the budget by 2013, the city can ensure long-term fiscal health.
Recommendations related to Competitiveness
Wage increases must be kept below inflation, and fringe benefits must be reformed to be more in line with those of other public and private-sector entities to maintain the city's competitiveness.
The City must shift from a 35- to a 40-hour workweek and adopt work rule changes and technological innovations to enable the City to operate with fewer workers, which is essential for competitiveness.
A smarter, rather than bigger, capital budget will focus on better use and maintenance of existing assets rather than ambitious plans for expansion to ensure the city's competitiveness.
The City must reduce the immense and escalating cost of the municipal payroll and the enormous burden of municipal debt to preserve the city's competitiveness.
Every employee should contribute to his or her health insurance premiums, the retirement age should be increased for new employees, and they should contribute more to their pensions to support the city's competitiveness.
The City needs to borrow less money and reduce the amount of debt service paid out of its operating budget to maintain its competitiveness.
Key Data
$15 billion
— The increase in the cost of compensating City employees, including pension and fringe benefits, from fiscal year 2000 to 2009.
80 percent
— The increase in the cost of compensating City employees, including pension and fringe benefits, from fiscal year 2000 to 2009.
$100,000
— The average compensation of a New York City municipal worker.
$6.5 billion
— The projected interest on the city's debt by 2013 if borrowing is not reduced.
9 percent
— The projected portion of the budget that will be consumed by interest on the debt by 2013.
20 percent
— The reduction in the number of City workers during the fiscal crisis of the 1970s.
New York State must implement aggressive spending reductions to address a growing budget gap and maintain its status as a competitive place to live, work, and do business. The state's current fiscal trajectory, driven by unsustainable growth in Medicaid, personnel costs, and education aid, threatens its economic standing and necessitates structural changes rather than tax increases or further borrowing.
Recommendations related to Competitiveness
New York State must implement aggressive spending reductions to address the budget gap and remain competitive.
The state should stop sending education aid to wealthy districts that already have abundant resources to support well-funded schools.
New York must avoid increasing taxes, as the state is already ranked 49th for tax climate and hospitality toward economic growth.
The state must refrain from further borrowing, as current debt levels already bump up against the state's debt cap and jeopardize credit ratings.
New York must avoid passing costs on to local governments, as the local tax burden is already the highest in the nation.
Key Data
$18.2 billion
— The projected budget gap by 2012-13.
49th
— New York's ranking among states for tax climate.
65%
— The amount more New York spends per pupil than the national average.
55%
— The expected growth in required pension contributions.
36%
— The expected growth in Medicaid spending over the next three years.
$58 billion
— The amount of planned outstanding state-supported debt by 2013-14.
New York's power subsidy programs for economic development are poorly targeted, often lacking transparency and failing to align with broader energy conservation goals. These subsidies create an uneven playing field, with 92% of manufacturing firms in Western New York struggling to remain competitive without them, while some individual companies receive per-job subsidies as high as $164,000.
Recommendations related to Competitiveness
Phase out current programs, as current contracts should be allowed to expire to ensure that economic development subsidies do not create an unlevel playing field for businesses that do not receive benefits.
Include assistance for firms with high energy costs as part of a comprehensive economic development strategy to better target industries that New York can effectively attract and retain.
Sell power no longer used for economic development at market rates to ensure that funds remain devoted to strategic economic development goals.
Link energy conservation and economic development goals and programs to ensure that firms receiving benefits are operating efficiently.
Key Data
$479 million to $640 million
— Estimated annual spending by the New York Power Authority on nine economic development programs.
92%
— Percentage of manufacturing concerns in the Western New York economic region that struggle to be competitive without power subsidies.
$164,000
— The highest per-job subsidy amount received by some beneficiaries of the power programs.
$600 million
— The value of newly negotiated capital improvements by Alcoa over 30 years in exchange for power allocations.
$157 million
— The estimated annual worth of the subsidy promised to Alcoa.
$5,836 to $7,883
— The range of per-job subsidies offered by the five hydro programs.
New York's current economic development programs, which provide discounted power to businesses, are ineffective and fail to support the state's long-term energy and economic goals. These programs should be phased out in favor of a more strategic, transparent approach that links energy conservation with economic development.
Recommendations related to Competitiveness
New York should phase out current economic development programs, as no new legislation should be passed to reauthorize them and current contracts should be allowed to expire.
State leaders should include assistance for firms with high energy costs as part of a comprehensive economic development strategy administered by Empire State Development.
NYPA should sell power no longer used for economic development at market rates, which would generate between $479 million and $640 million in additional revenue.
Firms that receive benefits should be required to submit to energy audits and comply with best practices for energy efficiency to link energy conservation and economic development goals.
Key Data
$479 million to $640 million
— Estimated annual cost of NYPA's economic development programs.
2,322 megawatts
— Total power reserved for the nine economic development programs.
453,914
— Total jobs committed under the economic development programs.
$5,836 to $7,883
— Per-job subsidy range for hydroelectric power programs.
$390 to $630
— Per-job subsidy range for purchased power programs.
1.8 cents to 2.2 cents
— Price per kilowatt-hour paid by program recipients, compared to the market rate of 6.7 cents.
New York's pension sweeteners drive up government costs and undermine the state's economic competitiveness, with local tax burdens already 78 percent above the U.S. average. Legislators are urged to reject new pension enhancements and instead support a new pension tier for future workers to ensure more reasonable and affordable benefits.
Recommendations related to Competitiveness
Legislators should refrain from introducing or supporting any pension sweetener legislation during the remainder of the session.
Legislators should support the legislation endorsed by Governor David Paterson and New York City Mayor Michael Bloomberg that would create a new pension tier for future workers.
Key Data
$292 million
— The amount of required employer contributions to pension funds in 1999.
$2.6 billion
— The amount of required employer contributions to pension funds currently.
$5.6 billion
— The total amount of pension benefit payments reached in 2008.
78 percent
— The amount by which New York's local tax burden exceeds the U.S. average in dollars per $1,000 in personal income.
35 percent
— The amount by which New York's combined state and local tax burden exceeds the U.S. average.
9 to 1
— The ratio of employer to employee contributions in New York’s State and Local Retirement Systems.
New York's Empire Zone Program has proven to be a wasteful use of state resources, with 58% of participating firms failing to meet job creation and investment targets. The state should phase out this program and replace it with a more targeted economic development strategy that focuses on strategic growth industries and distressed areas.
Recommendations related to Competitiveness
The state should phase out the Empire Zone Program, which is a largely wasteful use of limited state resources.
New York should replace Empire Zones with a more targeted approach to statewide and regional economic development that stimulates the creation of good jobs and encourages investment in growth sectors.
The state should decertify businesses in substantial noncompliance with their Empire Zone contracts.
The state should cease any new commitments that fail to meet well-defined, strategic objectives.
New York should develop a new program that focuses on strategic growth industries and offers deeper benefits for the most distressed areas of the state.
Key Data
$600 million
— Annual cost of the Empire Zone Program.
400%
— Maximum variation in the value of awards given to companies.
58%
— Percentage of participating firms that fell short of their job creation and investment targets in 2006.
60%
— Minimum amount by which the majority of participating firms missed their targets.
69% to 79%
— Failure rate of participating firms in several regions.
Public-private partnerships offer a strategic method to improve infrastructure management by leveraging private sector expertise to enhance efficiency and reduce long-term costs. By focusing on assets in poor condition, such as bridges and school buildings, these partnerships can modernize essential facilities without relying on new government funding sources.
Recommendations related to Competitiveness
PPPs should be focused on achieving efficiencies in the life-cycle costs of facilities and ensuring their long-term maintenance at standards higher than typically achieved by direct public-sector operation.
New York’s leaders should focus on assets that are in poor condition and have a history of poor maintenance.
Large up-front payments should be avoided, as the temptations to use the proceeds for political expedient purposes or short-term budgetary balance, rather than for infrastructure investment, are too great.
The public sector must ensure these partnerships demand enhanced management capacity—particularly with respect to contract negotiation, design of performance outcomes, and monitoring—in order to be successful.
PPPs need not be limited to large facilities; smaller assets can work as well when several similar assets are grouped together for a partnership with a single private partner.
Key Data
$1.8 billion
— The contract value to build the Airtrain from Kennedy Airport to the Jamaica Station of the Long Island Rail Road.
20-year
— The duration of the partnership to rebuild and operate JFK Airport Terminal Four.
20-year
— The duration of New York City’s partnership with Cemusa, Inc. for the design, construction, and maintenance of street furniture.
New York's Medicaid nursing home payment system is the most expensive in the nation, yet it fails to deliver superior care or better staffing levels compared to national averages. To improve efficiency and quality, the state should transition to a standardized, competitive base rate system that rewards performance and aligns with national standards rather than relying on outdated, facility-specific historic costs.
Recommendations related to Competitiveness
A new payment strategy should address the problems in current rates by changing from a facility-specific to a standardized base rate system that varies primarily by differences in patient-specific characteristics and in geographic labor costs.
New York homes should be staffed at the federally recommended level of 4.1 hours of care per patient per day.
New York State should develop a set of quality indicators such as those being used in other states and being tested by Medicare to assess patient outcomes.
An accountability system to ensure that the new staffing standards are met needs to be enforced, including auditing systems to detail whether the level of staffing assigned to a patient meets the criteria required.
Financial incentives to provide measurable quality outcomes should be built into the system.
Key Data
$1.2 billion
— Estimated annual savings from changing the way the Medicaid program pays nursing homes.
$45 billion
— Projected cost of New York's Medicaid program in fiscal year 2008-09.
$187
— Average daily Medicaid payment to nursing homes in New York.
$130
— Average daily Medicaid payment to nursing homes for the rest of the nation.
4.1 hours
— Federally recommended minimum staffing requirement for nursing home patient safety.
3.6 hours
— Direct care nursing hours per patient day provided in New York in 2005.
The Empire Zone program, originally designed to assist economically distressed areas, has become an ineffective and costly vehicle for tax breaks that frequently fail to meet job creation targets. Because the program is riddled with loopholes and lacks accountability, it should be abolished to better allocate scarce public resources for economic growth.
Recommendations related to Competitiveness
The Empire Zone program should be abolished because its problems are extensive and longstanding, and its impact is dubious.
Increasingly scarce public resources should no longer be spent in this unproductive way.
New York should end the program rather than expanding or perpetuating it, as it is unfair to taxpayers and residents of communities not receiving strategic economic development assistance.
Key Data
$582 million
— The cost of the Empire Zone program in 2008, representing a twenty-fold increase in just eight years.
$514 million
— The total amount of Empire Zone tax credits claimed in 2006.
$391 million
— The amount of tax credits claimed by just 500 firms in 2006, representing 76 percent of the total.
$900 million
— The amount of unused tax credits firms have that can be used in future years.
$127 million
— The amount of tax credits that went to Fortune 1000 firms in 2006, or about 25 percent of the total annual claims.
9,800
— The number of certified businesses in 82 Empire Zones statewide.
New York City maintains the highest or second-highest business tax burden among the locations studied, with combined federal, state, and local taxes reducing the rate of return on new business investment by 36% to 50%. While recent state budget changes are projected to lower the average effective tax rate in the City from 42.1% to 40.9%, the City is expected to retain its overall ranking as the highest-tax location for businesses.
Key Data
36-50%
— The range by which combined federal, state, and local taxes reduce the rate of return on new business investment, depending on location and industry.
42.1% to 40.9%
— The projected reduction in the average combined federal-state-local effective tax rate in New York City for representative firms following 2007-08 state budget changes.
0.9 to 1.5 percentage points
— The amount by which the after-tax rate of return in the highest-tax jurisdiction is lower than the rate of return in the lowest-tax jurisdiction.
7.5% to 7.1%
— The reduction in the top state corporate tax rate adopted in the 2007-08 state budget.
New York City must improve its performance management and accountability by better aligning its budget with program results, focusing on efficiency, and utilizing comparative benchmarking to remain competitive. By adopting these practices, the city can better track its progress, improve service delivery, and ultimately enhance its ability to attract residents and businesses.
Recommendations related to Competitiveness
New York City should connect money and performance in the budget by reorganizing it to better track programs and program performance.
City leaders should focus on efficiency measurement by making the measurement and reporting of unit costs a high priority in every service area.
The City should improve outcome measurement and reporting by pushing leaders to develop and track desired results for every service area.
New York City should develop and present comparative performance measures so that New Yorkers can compare the caliber of their services to those provided by other competitor cities.
The City should expand the use of citizen-derived outcome measures by measuring public perception of City services through satisfaction surveys rather than just complaints.
Key Data
24
— Number of the 30 largest U.S. cities that publish performance metrics in their budgets.
$54 billion
— The total size of the New York City enterprise.
13.2 million
— Total calls handled by the 3-1-1 system in fiscal year 2006.
47%
— Percentage of 3-1-1 calls that were for information in fiscal year 2006.
6.2
— Police workforce per 1000 population in New York City.
43.4
— Total arrests per 1000 population in New York City.
New York State must balance the need for education finance reform with the necessity of maintaining its economic competitiveness, as it is already the most heavily taxed state in the nation. To achieve this, the state should focus on generating revenue through efficiency improvements, expanded gambling, and tax base broadening rather than increasing broad-based taxes that could drive businesses away.
Recommendations related to Competitiveness
New revenues for education finance reform should be generated in a way that does not compromise the competitiveness of New York State.
Eliminating inefficiencies in the system could generate at least $1.2 billion annually, which is preferable to raising broad-based taxes that could worsen New York’s competitiveness.
Expanding gambling activities could generate an additional $2 billion, an option preferable to a tax increase because it would not increase the overall tax burden.
Broadening the tax base through increased enforcement of sales tax on remote purchases, extending the sales tax to professional services, and revising the corporate income tax could raise up to $2.6 billion a year to avoid placing the State at a disadvantage relative to other states.
Key Data
$1.2 billion
— Annual savings from eliminating educational inefficiencies to avoid broad-based tax increases.
$2 billion
— Potential revenue from expanding gambling activities, which avoids increasing the overall tax burden.
$2.6 billion
— Potential annual revenue from broadening the tax base, an alternative to raising broad-based taxes.
$4.7 billion - $5.8 billion
— Total revenue target for education reform designed to maintain the state's competitive standing.
New York City must improve its performance management by aligning budgets with program goals, measuring efficiency, and tracking outcomes to better compete with other cities for jobs and residents. By adopting comparative performance measures and resident satisfaction surveys, the city can enhance accountability and ensure it provides high-quality services for the price paid.
Recommendations related to Competitiveness
The budget should be reorganized to better align with programs and program performance.
Measuring and reporting unit costs should be a high priority in every service area.
Leaders should push to develop and track desired results measures for every service area.
New Yorkers should be able to compare the caliber of their services to those provided by other competitor cities.
Public perception of City services should not be measured just by complaints, but also by satisfaction survey measures.
Key Data
24
— of the 30 largest U.S. cities publish performance metrics in their budgets.
15
— of the 30 largest U.S. cities use resident satisfaction survey measures in their performance reporting.
33%
— of local governments report that survey results are used to make policy decisions.
13.2 million
— calls handled by the 3-1-1 system in fiscal year 2006.
150
— cities and counties currently participate in the ICMA Center for Performance Measurement.
45,000
— calls handled per day by the 3-1-1 system.
New York State's fiscal policies, including high local tax burdens and excessive debt, place the state at a competitive disadvantage compared to other regions. To improve economic standing, the state must implement structural reforms to its Medicaid, pension, and debt management systems while increasing budget transparency.
Recommendations related to Competitiveness
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Discontinue issuance of State-funded debt to cover operating deficits.
Subject public authority borrowing to more rigorous financial review by an enhanced Public Authorities Control Board or by the Division of Budget.
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Key Data
$105.8 billion
— Total debt outstanding for the State and its authorities at the end of fiscal year 2004–05.
158 percent
— The local government portion of the tax burden in New York relative to the national average.
$5.8 billion
— Estimated annual savings from changing Medicaid policies, including reducing non-competitive rates and rationalizing utilization.
$4.2 billion
— Projected budget gap for the next fiscal year based on the budget enacted for the current year.
$7,912
— New York's average Medicaid spending per beneficiary, which is 176 percent of the national average.
$11.5 billion
— Amount of outstanding State supported debt used to pay for operating expenses.
New York's excessive borrowing by public authorities has created a massive debt burden that contributes to an uncompetitive tax environment for residents and businesses. To address this, the state must implement stricter controls on debt issuance and foster greater competition among private entities seeking tax-exempt benefits.
Recommendations related to Competitiveness
New York should adopt a new constitutional limit that would apply to all state-supported debt to reduce the uncompetitive tax burden.
The state should foster more competition among private entities for tax-exempt benefits to ensure projects are chosen based on merit rather than political favoritism.
The governor and the budget director should be given responsibility for preparing a comprehensive, multi-year capital plan that includes both state agencies and authorities.
The Public Authorities Control Board should be abolished because it has failed to provide adequate analysis of the feasibility of state authority projects.
Key Data
$166 billion
— Outstanding debt held by New York's public authorities.
$227 billion
— Total outstanding debt issued by New York state and local governments and their authorities.
$45 billion
— Current state-supported debt.
$4 billion
— Amount of state-supported debt that was approved by voters, representing 9 percent of the total.
New York State's excessive debt burden, which is nearly $10 billion above affordable levels, threatens its economic future and creates a competitive disadvantage compared to other states. To address this, the state must implement constitutional debt reform that establishes binding limits based on affordability and restricts borrowing to long-term capital projects.
Recommendations related to Competitiveness
Voters should reject bond referendums such as the Transportation Bond Act of 2005 until debt is brought under control.
The State needs a new constitutional limit that does not require voter approval for every debt issuance, but does impose a binding limit that is linked to ability to pay.
Establish a new debt limit based on the concept of affordability as determined by an independent Debt Policy Committee.
Apply the limit to all forms of state-backed debt, including such bonds issued by authorities.
Restrict the use of borrowed funds to true capital investments.
Key Data
$46.7 billion
— Total outstanding state-funded debt as of the report's publication.
$10 billion
— Amount by which New York's debt exceeds affordable levels.
$43.0 billion
— Amount of 'backdoor' borrowing that does not require voter approval.
$11.5 billion
— Amount of backdoor borrowing used to underwrite annual operating deficits instead of capital projects.
$19 billion
— Amount of new debt planned to be added in the next five years.
$2.9 billion
— Amount authorized by the Transportation Bond Act of 2005.
Small business leaders in New York City and northern New Jersey identify the overall cost of doing business, proximity to markets, and access to skilled labor as the most critical factors for their success. While generally satisfied with their current locations, many business owners express dissatisfaction with the high cost of doing business, highlighting the need for government policies that address taxes, fees, and regulations to sustain regional economic growth.
Recommendations related to Competitiveness
Those costs that can be controlled through government actions should be given renewed attention.
Public policy regarding taxes, fees, zoning rules, and utility regulations should be reviewed as they can adversely affect business costs.
A favorable business culture and public policies that encourage enterprising individuals to start businesses are critical to sustaining employment growth in the region.
Key Data
10%
— Proportion of business leaders who would move for a cost savings of less than 10%.
20%
— Proportion of business leaders who would relocate for a cost savings of greater than 20%.
67%
— Percentage of New York City business heads who would expand at their current location.
82%
— Share of firms in northern New Jersey that have obtained bank credit.
40%
— Percentage of New York City business heads who report that their business operations are routinely hampered by transportation congestion or delays.
New York City's fiscal health and economic competitiveness are hindered by inefficient service delivery and a tax structure that places an unusually high burden on commercial property compared to other major cities. To address multi-billion dollar budget gaps, the city must implement structural reforms, such as increasing civilian work hours, streamlining procurement, and restructuring special education, rather than relying on temporary borrowing or tax increases.
Recommendations related to Competitiveness
The City should require civilian employees to work a 40-hour work week to increase efficiency and reduce the number of positions needed.
New York City should implement an advanced e-procurement system to lower transaction costs and reduce prices from vendors.
The City should move students from more restrictive to less restrictive environments in special education to improve outcomes and reduce costs.
The Police Department should reschedule the police officers’ work day to increase time in law enforcement and decrease paid time for changing uniforms.
Responsibility for energy conservation in City agencies should be centralized within the Office of the Mayor to increase efficiency and negotiate savings targets.
Key Data
$498 million
— Annual savings from requiring civilian employees to work a 40-hour work week.
$197 million
— Annual savings from streamlining the City's procurement process.
$267 million
— Annual savings from restructuring special education services.
$251 million
— Annual savings from implementing more rational staffing at the Police Department.
$47 million
— Annual savings from energy conservation at municipal agencies.
$6.4 billion
— Projected budget gap for fiscal year 2003-04.
New York City's procurement process is overly bureaucratic, relying on excessive paperwork and fragmented oversight that discourages vendors and drives up costs. By implementing an integrated e-procurement system and streamlining administrative requirements, the city could save up to $197 million annually while fostering a more competitive and efficient environment for businesses.
Recommendations related to Competitiveness
Replace the Mayor’s Office of Contracts with a new procurement entity that offers “one-stop” oversight, a central place for vendors to interact with the City, and improved agency support services.
Implement an advanced e-procurement system similar to those functioning in several other jurisdictions.
Change the legal framework for procurement to give the Procurement Policy Board more independence and to permit new, cost-effective procurement techniques.
Small purchase limits for all goods and services should be increased to $100,000.
Public hearings for non-competitively bid purchases should be required only for procurements above $500,000.
Permit the use of reverse auctions for some commodities.
Key Data
$8.6 billion
— Amount spent by the City in fiscal year 2001 for construction, goods, and services.
12 million
— The latest estimate of sheets of paper produced to execute procurements.
$135 million
— Minimum annual savings the City would realize from implementing the recommended procurement reforms.
$197 million
— The more likely annual payoff in savings from implementing the recommended procurement reforms.
142,000
— The number of transactions the City completes per year.
42
— The number of states expected to have some form of e-procurement in place by 2003.
New York State's competitiveness is declining relative to other large states, with the state ranking in the bottom tier for fiscal policy and social welfare, and showing 'losing' performance trends in population, economic size, and technological development. While the state maintains a top-tier position in several categories, its recent performance suggests these rankings are in jeopardy unless current trends are reversed.
Key Data
3rd
— New York State's current rank in population size among the ten largest states and two geographic neighbors.
$688 billion
— New York State's gross state product in 1998.
2,691
— New York State's property crime rate per 100,000 inhabitants in 1999.
12.8%
— New York State's state and local tax burden as a percent of personal income and capital gains in 1998.
19.4%
— New York State's state and local debt burden as a percent of personal income and capital gains in 1997.
15.4%
— New York State's share of the population living with income below the poverty threshold in 1998-99.
New York State and City face significant debt burdens that threaten their economic competitiveness by potentially forcing tax increases or service cuts. To address this, the state and city should adopt a new, comparative approach to debt affordability that establishes clear limits and creates independent oversight committees to manage long-term borrowing strategies.
Recommendations related to Competitiveness
New York State's elected leaders should bring the State's debt burden below the danger zone threshold identified in this report, and New York City's leaders should keep their debt below the relevant danger zone threshold.
New York City and New York State should create Debt Policy Committees to recommend long-run debt strategies and annual debt issuance limits.
The State Constitution should be amended to establish new limits on State and City debt.
New York State should develop a new plan to lower its outstanding debt, including doing more pay-as-you-go capital financing and devoting more of the current operating surplus to the retirement of outstanding debt.
The new limits should be made more sensible by replacing the existing constraints with an approach based on that developed in this report.
Key Data
$35.8 billion
— New York State's debt at the end of the 1999 fiscal year.
$46.8 billion
— New York City's debt at the end of the 1999 fiscal year.
$63.8 billion
— Total authority debt at the end of 1998.
New York's transportation infrastructure is a critical component of its economic competitiveness, yet the system faces significant challenges, including high operating costs and a multi-billion dollar gap in funding required to achieve a state of good repair. While the region possesses an extensive highway and rail network, it must address inefficiencies and prioritize investments to maintain its competitive edge against global rivals like Tokyo, London, and Paris.
Recommendations related to Competitiveness
New York’s leaders should address three key issues: how to improve transit system efficiency and ridership, how rapidly to achieve a state of good repair for the existing infrastructure, and how much new mass transit capacity is necessary.
An initiative aimed at identifying modern human resource measures could help enhance New York’s future competitiveness.
Efforts to increase ridership should focus on off-peak hours to reduce average costs per passenger.
Continued innovation in fare policy holds the potential of making New York competitive with other world cities in terms of more efficient operation of mass transit.
Exploration of modernized signaling and train control systems seems desirable since it could prove more cost-effective than construction of new lines as a way to expand rush-hour capacity.
Key Data
$12.2 billion
— Estimated funding needed for New York City highways and related facilities over the ten-year period spanning fiscal years 1998 to 2007.
$8.1 billion
— Amount allocated by the City for highway and related facility repairs over the ten-year period spanning fiscal years 1998 to 2007.
$20.4 billion
— Estimated funding needed to achieve and maintain a state of good repair for facilities operated by the Transit Authority as of 1998.
$1.79
— Cost per passenger for New York's bus system.
$1.39
— Cost per passenger for New York's rapid rail system.
$7.05
— Cost per passenger for New York's commuter rail system.
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