By Ed Ra
No one is coming back from Florida.
Just a few years after telling New Yorkers to “get out” if they disagreed with her agenda, Gov. Kathy Hochul is now hoping they will come back, after relocating their businesses and tax dollars to states like Florida, where raising a family and starting a business come with far fewer obstacles. New York has become unaffordable, overtaxed and hostile to economic growth. And nothing in Albany suggests that it’s about to change.
Hochul’s statements, in an interview with Politico, have nothing to do with reconciliation and everything to do with revenue. Unfortunately, her $263 billion spending proposal isn’t going to pay for itself.
New York’s fiscal model has become dangerously dependent on a shrinking share of high-income earners.
Democrats point to the number of millionaires as proof that increasing taxes on high earners won’t impact the tax base. The reality, however, is that we don’t have the same share of high earners we once did. More are choosing more affordable states like Florida and Texas, and given the punishing fiscal climate here, why wouldn’t they?
According to IRS data, New York’s share of the nation’s millionaires dropped from 12.7 percent in 2010 to just 8.7 percent in 2022, a more pronounced decline than any other state. New York used to have the second-highest share of U.S. millionaires, but we’re now fourth, behind California, Florida and Texas. When those high earners leave, or when fewer choose to come here in the first place, the consequences ripple across our entire economy.
According to the state Department of Tax and Finance, millionaires pay 41 percent of all state income taxes, while the bottom half of taxpayers contribute 0.2 percent. Clearly, the foundation of New York’s financial house is built on the revenues high earners provide.
The irony of progressives’ tax-the-rich pleas is that New York has already been doing it for years, and at higher levels than anywhere else in the country. People in the state’s highest income bracket are taxed at 10.9 percent, with New York City adding another 3.9 percent on top of that. The combined 14.8 percent is the nation’s highest tax burden.
Albany has a clear, detrimental cycle of spending recklessly, abusing taxpayer dollars and, as a result, driving people away. Every year, Hochul proposes another unprecedented state budget, and this year is no exception.
Since she took office, state spending is up 40 percent, the budget deficit has grown to $28 billion, and New York is facing historic unaffordability.
Following the governor’s proposal, Assembly Democrats fulfilled their tradition of piling on and proposed billions more in spending on top of the governor’s budget. Tax-and-spending repeatedly increases to account for the implementation of unsustainable new programs and policies. This year, Democrats proposed $9.2 billion more in spending and $3.6 billion in new taxes, including higher income taxes on top earners and increased business taxes statewide, with additional increases specifically impacting New York City financial firms. Between 2020 and 2023, 158 financial sector companies, with $1 trillion in assets, left the state.
With these tactics, New York isn’t going to win the tug of war against more business-friendly, lower-tax states. In fact, it feels like we’ve let go of the rope. What Hochul and the Legislature are failing to acknowledge is the solution: spend less. It isn’t complicated. Albany has two choices, cut spending or raise taxes, and again it’s choosing Door No. 2.
The final phase of this annual cycle, the one the administration stills fail to grasp, is outmigration. When costs rise and opportunities shrink, people inevitably leave.
Who would blame them? Our state ranks 45th in affordability, and overall costs have risen 20 percent since Hochul took office. Since 2020, New York has lost 1.1 million residents to states with lower taxes, a trend we cannot afford, literally.
If we want to reverse course, we need to break this cycle.
One-party rule in Albany can’t continue unchecked spending and raising taxes while expecting different results. Under the current conditions, more New Yorkers will continue to leave, and fewer will come back. Hochul’s shifting rhetoric is driven by a budget mess she created, not residents’ needs. We Assembly Republicans want you here because we value you, and we’ll do everything we can to make New York more affordable and livable for you and your family.
Ed Ra represents the 19th Assembly District and is the Assembly minority leader.
