New York is losing its grip as America's financial capital: Study

metro

by carl campanile

The Empire State is losing its grip as the nation's financial services center.

The financial services industry, which contributes significantly to New York State's gross domestic product (GDP), is in crisis as the population of high-income residents flees amid high taxes and rising housing costs. , revealed in a serious new investigation.

“While other states are attracting talent and investment to the sector, there is no guarantee of future success,” the New York State Business Council report said.

“Addressing the state’s tax burden, business environment, and cost of living will help secure New York State’s position as a national and global financial leader.”

The top four states for new high-paying financial services and insurance jobs over the past three years were Texas, Florida, North Carolina and Georgia, according to an analysis conducted by the Business Council.

New York State ranks 36th in growth rate, at just two-twentieths of 1%.

“While North Carolina and Florida are experiencing rapid growth in finance and insurance employment, New York's employment remains below national growth trends,” the report said.

Job losses ripple through the economy, as every employee in the financial sector creates nearly three more jobs in other sectors, the study said.

“This report should serve as a call to action for leaders across New York to forcefully address the competitiveness issues that threaten one of our most valuable and important economic forces, the financial industry.” The book says:

The average compensation package in New York's financial services industry is among the highest in the nation at $309,000 per year, with a salary of $275,800 and additional benefits of $34,000.

The numbers show New York State's population continues to decline, with a 2.7% decline from 2019 to 2022, the worst population decline among the 50 states during the COVID-19 pandemic. Ta.

Most of the population loss occurred in New York City and its suburbs, where many of the state's wealthiest residents live.

An examination of the net migration of residents found that the largest gross revenue outflow was from Manhattan, at about $11 billion.

“Data supports a flight of the wealthiest people from the New York City area,” the business group's review found.

In 2021 alone, the Empire State saw a net loss of $9.8 billion in income for people who moved to Florida, according to the report.

The study said this was no coincidence, noting that the Tax Foundation think tank rated New York state as having the highest combined state and local tax rate on residents, and the Sunshine State as having the lowest.

“This single competitive factor is [taxes] It is likely to play an influential role in the migration of the wealthy, as they benefit most by leaving high-income tax states for states with low or zero income taxes. ” says the study.

He also noted that New York is one of a handful of states that imposes an estate tax, derisively referred to as a “death tax.”

“Wealthy individuals are more likely to consider this tax in their location decisions,” the report says.

“Forcing action is needed,” the analysis concludes. “States need to address tax burdens, business climate, and cost-of-living issues that undermine their competitiveness.

“If the state does not address these issues, it risks losing its dominance in the financial and insurance industries and ultimately jeopardizes the health and prosperity of New York's economy.”