Why is it so expensive to live in New York?

Posted at: 04/22/2014 5:46 PM
Updated at: 04/24/2014 3:07 PM
By: Steve Flamisch

ALBANY – Kathy Miller and her family moved to New York from Pennsylvania. She said they discovered that just about everything here is more expensive.

"Income tax is the biggest," said Miller, of Ballston Lake. "It's double here than it is in Pennsylvania. Property taxes, school taxes, groceries, gas, even our car insurance is more in New York State."

A report by the non-profit Tax Foundation found that New Yorkers have shouldered the highest state and local tax burden in the country for 34 of the last 35 years for which data is available.

"New York has many great things going for it, but a big obstacle is the tax burden," said Joe Henchman, the Tax Foundation’s vice president. "Taxes are high, and they're complex in New York."

So why is it so expensive to live in New York? Gov. Andrew Cuomo has said there are too many local governments, though some experts disagree.

E.J. McMahon, president of the fiscally-conservative Empire Center for Public Policy, argued there are too many people working for the government: salaries, benefits, and pensions that drive up costs.

"We employ more people in the public sector, and pay them more, and also rig the rules for public contracting to cost more," McMahon said, adding that Medicaid is another big cost driver.

McMahon said New York’s labor laws tilt the bargaining table to favor unions. But Fred Floss, executive director of the labor-supported Fiscal Policy Institute, said that’s not true.

Floss, who teaches economics at Buffalo State College, said New York is really not that expensive given the quality of life compared to other states.

"New York is very competitive for what you get," Floss said. "What are the benefits versus the costs? If the benefits outweigh the costs, then you want to come and live in New York."

That’s what Holly Johnson discovered when she and her family moved to South Carolina. She said the taxes were lower, but the roads and schools were poor.

"We found that, for example, if you want a quality education for your children, you need to put them in a private school down there, which was very, very costly," said Johnson, of South Glens Falls.

Johnson said she was happy to move back. Others said they can’t wait to move out. It’s a decision driven by more than just dollars.