It comes as no surprise to beleaguered New Yorkers that the state’s economic outlook ranks dead last in the 17th annual “Rich State, Poor State Report.
Looking at factors such as taxes, fees, and government spending, the once vibrant Empire State has come in last place since 2017. It's no wonder New York leads the nation in people leaving for states such as Utah, which has the best economic outlook, according to the study.
Published annually by the non-partisan American Legislative Exchange Council, the rankings are based on a state's standing in 15 policy variables. Each factor is influenced directly by state lawmakers through the legislative process, the authors note.
“Generally speaking, states that spend less—especially on income transfer programs—and states that tax less — particularly on productive activities such as working or investing—experience higher growth rates than states that tax and spend more,” thet state.
New York also has the highest personal and corporate income tax rates, the highest estate/inheritance taxes, and is the worst Right to Work state for employees wanting to opt out of labor unions. It did climb out of the cellar in one category, coming in 49th in debt as a share of tax revenue.
Controlled by Gov. Kathy Hochul and her Progressive Democrat colleagues in the legislature, New York breaks records each year for government spending. This year’s $237 billion budget is $120.5 billion more than Florida, which has a larger population and no income tax. Taxpayer relief is not expected anytime soon as Hochul’s Division of the Budget estimates that the state will run a $2.3 billion deficit in 2026, $4.3 billion in 2027, and $7.3 billion in 2028.
A huge budgetary drain will be the Sanctuary State’s spending on illegal immigrants. Hochul budgeted $2.1 billion this year, with enormous costs being passed on to local municipalities now on the hook to provide education, emergency, and social services. New York City Mayor Eric Adams said the migrant crisis will “destroy” the city. He announced drastic cuts to police, sanitation, and programs as upwards of $12 billion will go to migrants over the next two years.
Other areas where New York scored among the worst were Average Workers' Compensation Costs (47th), Property Tax Burden (46th), Minimum Wage (44th), and the Amount of Public Employees vs. Population (44th). The state dwells in the nation’s economic basement along with Louisiana, West Virginia, and New Jersey.
Comprised of nearly one-quarter of the country's state legislators and stakeholders from across the policy spectrum, Legislative Exchange Council members represent more than 60 million Americans and provide jobs to more than 30 million people in the United States. Their annual Rich State, Poor State report was written by economists Stephen Moore, Jonathan Williams, and Arthur B. Laffer, developer of the “Laffer Curve,” which shows how lower government taxes relate to higher economic growth.