"Upstate's businesses and taxpayers are paying state and local taxes that are about $5 billion to $6 billion a year higher than they would be if they were living in, say, Ohio," the report said. "And that's more than enough to impose a significant drag on the region's economy—one reason Upstate's job growth has lagged behind competing states' for so long."
State income taxes per capita Upstate are about 22 percent above average, which means Upstaters pay about $800 million a year above the norm. But the disparity in
local taxes is even higher: about 55 percent above the national average. This costs Upstate taxpayers about $4.2 billion a year more than they would pay if they paid local taxes at the national average per capita, the report said.
This difference includes higher property taxes (more than $3 billion extra a year) and higher local sales taxes (more than $1.3 billion extra a year), the report noted:
Property taxes: "In Monroe County, for example, property taxes collected by all units of local government (the county, school districts, Rochester, towns, etc.) in 2001 added up to almost $1,400 per capita—about 70 percent above the national average," the report said. "Property taxes in Albany County appear to have been about 75 percent above the national average per capita. In Broome County the gap was about 46 percent; in Erie County , about 42 percent; in Onondaga County, about 48 percent; in Oneida County, about 25 percent."
Sales taxes: Local sales taxes Upstate are even farther above the national norm in percentage terms, the report noted. "Local sales taxes per capita Upstate were $369 in 2001, or about 110 percent above the national average—some $1.3 billion higher than they would have been if they had matched the national average. In Ohio, by contrast, local sales tax collections per capita were less than half the national average."
Upstate's taxes are so far above average because spending is higher, especially in two key spending areas: government payroll and Medicaid.
Local government payrolls: Upstate local governments have some 93,500 more employees than they would have if they merely matched the national average ratio of local government workers to population. This excess of more than 25 percent along costs Upstate taxpayers more than $4 billion extra a year.
Local Medicaid spending: New York's Medicaid program costs Upstate taxpayers about $1 billion more a year in state and local taxes than it would if it matched the national average per recipient.
As of 2001, total Medicaid spending Upstate was about $2 billion more than the program would spend Upstate if New York reduced its cost per recipient to the national average. In other words, if New York held its Medicaid spending to the national average, Upstate taxpayers could save about $1 billion in their state and local taxes. (The other $1 billion in savings would go to the federal government).