Capitol Pressroom: Subsidies and sluggish Upstate job growth

March 28, 2017. By Alyssa Plock

A collaboration of reporting from Investigative Post, ProPublica, and the Columbia University Graduate School of Journalism shows that despite billions in subsidies, upstate job growth remains sluggish. Today three guests join Susan Arbetter to analyze the subsidy issue: Jim Heaney, Founder, Editor and Executive Director of Investigative Post, Ron Deutsch, Executive Director of the Fiscal Policy Institute, and EJ McMahon, Founder and Research Director of the Empire Center for Public Policy.

Philly Mayor Draws Incorrect Immigrant Biz Stat From Flawed Fact-Sheet

March 28, 2017. In an article featured in the Billy Penn, the author discusses how Philadelphia’s Mayor, Jim Kenney, quoted an immigrant business statistic from the 2015 Greater Philadelphia Chamber of Commerce report that cited FPI’s report, “Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow.” The fact-sheet misinterpreted FPI and Americas Society/Council‘s statistic which referred to Main Street Businesses, not all business ownership.

The fact-sheet cited a 2015 Greater Philadelphia Chamber of Commerce report, which itself was referencing analysis produced by the Fiscal Policy Institute: immigrant business owners accounted for 96 percent of Main Street business growth in the city from 2000 to 2013.

What are Main Street establishments, exactly? The research, which was co-produced by the Americas Society/Council of the Americas, uses it as an umbrella term for the following categories of businesses: “neighborhood services,” like salons and laundromats; “accommodation and food services,” like taverns, restaurants, but also inns; “retail” including a wide range of shops.

After PolitiFact PA contacted representatives for the mayor, Kenney retweeted his earlier message with a new note that the figure was referring to Main Streets specifically.

Here’s the link to Billy Penn.

Investigative Post: “Job growth across upstate New York remains sluggish despite billions in economic development subsidies”

This is the first part of a series that runs through Thursday. The full lineup of stories, columns and radio interviews can be found here »

March 28, 2017

Gov. Andrew Cuomo has sunk a lot of taxpayer money – $25 billion by his estimate – into recharging upstate’s moribund economy.

The governor has increased spending on subsidy programs to record levels, launched bold policy initiatives and crisscrossed upstate to announced projects he has frequently described as “game-changers.”

“Economic success is shared all across the state. It’s not just New York City that’s doing well, it’s the entire state,” the governor declared in his 2017 State of the State address in Syracuse.

That’s the rhetoric. The reality, as borne out by employment data, is decidedly different.

Employment upstate has grown by only 2.7 percent during Cuomo’s tenure – compared with 13.1 percent downstate and 11 percent nationally. Four of upstate’s 12 major metropolitan areas have actually lost jobs since Cuomo took office.

If it were a state, upstate’s job growth would rank fourth-worst in the nation, below, among others, Mississippi.

What’s more, 88 percent of the net jobs added upstate during the Cuomo years have been in low-wage sectors, led by restaurants and bars, employment data shows.

….“The governor has certainly ramped up economic development spending more than any governor in my 25-year history in Albany,” said Ron Deutsch, executive director of the Fiscal Policy Institute, a labor-backed think tank.  (read full article)

Over 80 Upper-Income New Yorkers Urge Governor Cuomo and Legislature to Extend and Expand the Millionaires’ Tax

March 21, 2017. The Fiscal Policy Institute and Responsible Wealth released a letter signed by over 80 wealthy New Yorkers urging Governor Cuomo to extend and expand the millionaires’ tax, currently in place but set to expire at the end of this year.

Signers include Eileen Fisher, Abigail Disney, Steven C. Rockefeller, George Soros, David A. Levine, Dal LaMagna, Lewis B. Cullman, among other notable names. All signers, many members of the Responsible Wealth project, are residents of New York State with annual incomes of $650,000 or above, putting them in the top 1% of earners in the state.

 

PDF of list of news coverage of the story.

PDF of the full letter.

PDF of the press release.

PA Joins Other Cities in Legal Action Against Travel Ban; Cities Join States in Effort to Halt White House Order

March 24, 2017. FPI and Americas Society/Council of the Americas co-released report on immigrant business ownership, “Bringing Vitality to Main Street, How Immigrant Small Businesses Help Local Economies Grow”, was cited in an amicus brief that Philadelphia submitted to the federal district court in Seattle to challenge President Trump’s travel ban.

The City of Philadelphia is among two dozen U.S. cities that have filed a friend-of-the-court (amicus) brief in the federal district court in Seattle, where six States have challenged President Donald Trump’s second attempt at restricting travel into the United States from six majority-Muslim nations is being heard.

The City of Philadelphia provided data to counsel that prepared the amicus brief on behalf of the Cities.  Among that data:

In Philadelphia, in 2013, immigrants made up 14 percent of business owners, and 28 percent of the area’s “Main Street” business owners, including 23 percent of retail store owners and 34 percent of restaurant owners. Of approximately 13,000 immigrant business owners overall in metro Philadelphia, Iran is the 10th largest single country of birth for immigrant business owners.

Here is the link to The Philadelphia Sunday.

FPI Policy Brief Press Statement: Time to Expand the Millionaires’ Tax

FOR IMMEDIATE RELEASE:

Contact: Ron Deutsch, Fiscal Policy Institute, 518-469-6769, deutsch@fiscalpolicy.org

March 7, 2017. The Fiscal Policy Institute (FPI) recently released a Policy Brief analyzing New York’s gross income disparity, recommending common sense solutions to narrowing the gap.

Since the 1980s, the income gap in the United States—as indicated by the wealthiest 1 percent’s share of total income—has grown significantly. In fact, the Congressional Budget Office (CBO) has been compiling income data since 1979, and has found that the top 1 percent’s income has grown exponentially, while that of the bottom 99 percent has grown at a much slower rate. According to a 2016 report published by the Economic Policy Institute (EPI) for the Economic Analysis and Research Network (EARN) entitled “Income Inequality in the US By State, Metropolitan Area, and County”, the top 1 percent earned 45 times more than the bottom 99 percent in New York, representing the greatest disparity of any state.

 “New York state leads the nation in income inequality. We have the largest gap between those that earn the most and those that earn the least,” said Ron Deutsch, Executive Director of the Fiscal Policy Institute (FPI). Deutsch further notes that nearly half (48 percent) of the total increase in incomes in New York from 2009 to 2015 accrued to the wealthiest 1 percent. “This extreme inequality is not only hurting our residents, it is hurting our economy as well.”

 While the wealthiest 1 percent of New Yorkers are taking home the lion’s share of income gains, they pay a smaller share of their income in combined state and local taxes than lower and middle-income families—even with the state’s millionaires’ tax in effect. New York households with incomes under $100,000 pay higher effective state and local tax rates (ranging from 10.4 percent to 12 percent) than the wealthiest 1 percent of households (who pay 8.1 percent).

One reason the combined impact of state and local taxes is regressive is that most low- and middle-income families in New York pay a greater percentage of their income in sales and property taxes than they do in income taxes. Unfortunately, according to Deutsch, while New York State’s income tax is mildly progressive, it’s not progressive enough to offset the effects of highly regressive sales and local property taxes.

Given New York’s extreme income polarization, Deutsch emphasized that “The State’s top economic priority in 2017 has to be addressing its enormous income gap by passing an expanded millionaires’ tax.”

The best response to the regressive nature of New York’s overall state and local tax system is to make the personal income tax more progressive. To do that, New York should build on the governor’s proposed extension of the millionaires’ tax–currently set to expire at the end of 2017 –as well as implement either FPI’s 1% Plan for New York Tax Fairness or the Assembly Majority’s expansion plan, both plans would generate significantly more revenue ($2 billion or more) than straight extension.

“Our proposal would build on the state’s millionaires’ tax, retaining the phased-in middle class tax rates enacted last year, and increase tax rates slightly for the richest 1% of New York’s taxpayers,” says Deutsch.

The Fiscal Policy Institute estimates that their 1% Plan would raise income tax revenues by approximately $6.2 billion, roughly $2.5 billion more than the governor’s proposed extension of the millionaires’ tax.

“The governor’s proposed extension of the millionaires’ tax will help New York continue to support statewide priorities from education to health care”, said Deutsch. “And while it will also help offset the regressive nature of New York’s overall state and local tax burden, FPI would like to see the state go one step further by pairing it with enhanced low-income tax credits and additional high-end tax brackets.”

For more information on FPI’s 1% Plan for New York Tax Fairness, please click here.

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The Fiscal Policy Institute (www.fiscalpolicy.org) is an independent, nonpartisan, nonprofit research and education organization committed to improving public policies and private practices to better the economic and social conditions of all New Yorkers.

Report: “Undervalued and Underpaid: How New York State Shortchanges Nonprofit Human Services Providers and Their Workers”

March, 2017. The substantial growth in New York’s nonprofit human services sector has come in response to a host of
social, demographic and economic changes. The State and its local governments have turned to nonprofit
organizations to provide these critical services; these are public services that serve many populations,
including children and those with low incomes striving to enter the middle class. Millions of New Yorkers are
directly served, and all New Yorkers reap the benefits of more stable communities when their neighbors are
able to pursue healthy and satisfying lives and seek better opportunities.

These essential human services, however, come at a cost, and they should be paid for—in their entirety—by
government. These are public services, provided in keeping with New York’s constitutional requirement
(Article 17: “the aid, care and support of the needy are public concerns and shall be provided by the State
…”) and legislative determinations. The nonprofit human services workforce is, in effect, an indirect
government workforce. Given their charitable missions, nonprofits have readily stepped forward to accept
this public service delivery responsibility. However, New York State has not held up its end of the bargain.
The underfunding of human services is a serious and growing problem. Click here for a PDF of the full report.

This report was prepared and written by James A. Parrott of the Fiscal Policy Institute (FPI), with
the research assistance of Brent Kramer, FPI Senior Economist.

AP News: Rich New Yorkers Ask State to Raise Their Taxes

March 21, 2017

ALBANY, N.Y. (AP) — Some of the wealthiest New Yorkers are asking the state to raise their taxes.

Eighty people including George Soros, Steven Rockefeller and Abigail Disney wrote to lawmakers and Democratic Gov. Andrew Cuomo saying they and other top earners can afford to pay more to support schools, roads, bridges and programs to help poor and homeless New Yorkers. (read more)

Press Release: Over 80 Wealthy New Yorkers Urge Governor Cuomo to Extend and Expand Millionaires’ Tax

FOR IMMEDIATE RELEASE: March 21, 2017

Contact: Ron Deutsch, Fiscal Policy Institute, 518-469-6769, deutsch@fiscalpolicy.org

Mike Leyba, Responsible Wealth, 562-266-4357, mleyba@faireconomy.org

Over 80 Upper-Income New Yorkers Urge Governor Cuomo and Legislature to Extend and Expand the Millionaires’ Tax

As New York State braces for proposed federal budget cuts that could have a devastating impact on health care, education and infrastructure investments across the state, more than 80 New York residents with incomes in the top 1% have sent an open letter to Governor Andrew Cuomo and the New York State Legislature urging passage of an expanded and permanent millionaires’ tax.  An expanded and permanent millionaires’ tax would bring in nearly $6 billion in annual revenue, or over $2 billion more than the current tax – set to expire in 2017 – generates.

The Fiscal Policy Institute’s “1% Plan for New York Tax Fairness” calls for expanded top tax rates for the top 1% of New Yorkers. The plan also calls for continuation of the lower rates enacted last year for middle-income New Yorkers. The 1% Plan is similar to the Assembly-passed plan in that it would set new rates and top brackets, and would also generate a significant amount of new revenue.

The signers include Eileen Fisher, David A. Levine, Dal LaMagna, Lewis B. Cullman, Abigail Disney, Agnes Gund, Leo Hindery, Jr., Steven C. Rockefeller, and George Soros. All of the signers are residents with annual incomes of $650,000 or above, putting them in the top 1% of earners in New York State. Many signers are members of the Responsible Wealth project, which initiated the letter.

While the full text of the letter is included below, the letter states in part:

As New Yorkers who have contributed to and benefited from the economic vibrancy of our state, we have both the ability and the responsibility to pay our fair share. We can well afford to pay our current taxes, and we can afford to pay even more. Our state’s long‐term economic prosperity depends on strong investments in our people and our communities.

The Fiscal Policy Institute (FPI) has long supported not only extending the millionaires’ tax, but increasing the number of brackets at the top end and making the new structure permanent as well. The additional $2 billion raised under an expanded millionaires’ tax could be used to invest in our schools and infrastructure, address the state’s record levels of homelessness, hunger and poverty, and better position our state to handle the impact of any forthcoming federal funding cuts.

Contrary to the conservative insistence that progressive taxation will drive away the wealthiest taxpayers, these upper-income New Yorkers are not only staying put, but they actively support making the current millionaires’ tax permanent and more progressive. Since the millionaires’ tax was established in 2009, the number of millionaires has grown by 33 percent in our state.

Attorney Craig Kaplan said, “Since 2009, poverty in New York has increased and many state responsibilities – including education and housing subsidies – have gone underfunded. Our Legislature should strengthen the current millionaire’s tax, make it permanent, and dedicate the additional funds to improve the quality of life of ALL New Yorkers.” Kaplan and his wife, Anne Hess, were among the signers of a letter organized by Responsible Wealth in 2009 that called for a surtax on upper incomes to address New York’s then-$15 billion budget gap. The letter led to the first-ever income surtax in New York State, which was extended in 2011 in the form of the current millionaires’ tax.

David A. Levine of Manhattan, former chief economist for AllianceBernstein (at that time called Sanford C. Bernstein & Co.), stated, “I am among the many New Yorkers in the top 1% whose income is derived entirely from financial investments. It makes perfect sense that I should pay a significantly higher tax rate than working class and middle class people. And I believe I should pay a higher marginal rate than I do under the current millionaires’ tax.”

Eileen Fisher, founder of Eileen Fisher clothing company in Irvington, NY, said, “I believe those of us fortunate enough to find ourselves in the top 1% of income have a particular responsibility to support that public infrastructure. I wholeheartedly support extending and strengthening the current millionaires’ tax in New York.”

Dal LaMagna, Founder of Tweezerman Corporation, and currently President and CEO of IceStoneUSA, said, “Serious businesspeople understand it is essential for New York to make consistent investments in our infrastructure, environment, and workforce if we want economic growth, and this type of government investment helps make business success possible. Ultimately we benefit from paying our fair share of taxes.”

Sophie Robinson, a 28-year old inheritor and documentary filmmaker, said, “New York has the greatest inequality in the nation, yet fails to adequately provide for those most in need. To me, the millionaires’ tax is a simple matter of equity. Paying an additional 2-3% on my New York State income does not affect my standard of living. But having adequate tax revenue to invest in public transportation, infrastructure, parks and social services for those who are struggling makes New York a better place for all of us.”

Responsible Wealth project director Mike Lapham said, “Responsible Wealth members understand that their wealth has been built on government investment, and to remain economically competitive, New York State must invest in education and infrastructure. They are willing to pay taxes at a higher rate to enable the state to make those investments.” Responsible Wealth members lobbied for the original millionaires’ tax in 2009 and the extension in 2011. If the millionaires’ tax were to expire, the top 1% would get a $3.7 billion annual tax windfall, which would put New York State back in the predicament it faced in 2009.

“Far from threatening to leave the state, it’s refreshing to see this many wealthy New Yorkers are willing to expand and make permanent the temporary top income tax rates set to expire at the end of this year,” said Ron Deutsch, Executive Director of the Fiscal Policy Institute. “They support higher taxes on themselves so the state can fund our glaring human and physical infrastructure needs and have adequate revenue in place to handle pending federal cuts.”

Deutsch added, FPI’s “1% Plan for New York Tax Fairness” and the Assembly’s true millionaires’ tax have support from the very people who would be impacted by them, and they are saying they can more than afford an increase in the top marginal rates.”

The question of whether to extend, expand, make permanent, or end the current millionaires’ tax is central to the budget debate currently playing out in Albany. Governor Cuomo has said he supports extension of the millionaires’ tax at current levels; the Assembly-passed plan calls for setting new brackets and higher rates; the Senate majority currently opposes extension of the millionaires’ tax. These wealthy New Yorkers echo the sentiments of the general public who, according to recent public opinion polls, don’t want to see the millionaires’ tax expire.

The Fiscal Policy Institute (www.fiscalpolicy.org) is an independent, nonpartisan, nonprofit research and education organization committed to improving policies and practices to better the economic and social conditions of all New Yorkers. Founded in 1991, FPI works to create a strong economy in which prosperity is broadly shared.

Responsible Wealth (www.responsiblewealth.org) is a project of United for a Fair Economy (UFE). UFE engages in state and federal policy debates, provides trainings and support for economic justice organizers across the nation, and publishes illuminating reports. United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) nonprofit organization.

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PDF of FPI’s NYS Tax Structure Policy Brief

PDF of Letter to Governor Cuomo

PDF of Press Release

Upper Income New Yorkers Support Expanding the Millionaires Tax

Dear Governor Cuomo and Legislative Leaders,

We are upper‐income New Yorkers who treasure the quality of life in our state. However, we are deeply concerned that too many New Yorkers are struggling economically, and the state’s ailing infrastructure is in desperate need of attention. We cannot afford to ignore these challenges.

As business leaders and investors, we know that the long-term stability and growth of a company requires investments in both its human capital and physical infrastructure. The same is true for our state.

It is a shameful fact that child poverty in New York State is at an unacceptably high level, exceeding 50 percent in some of our urban centers. New York State has a record number of homeless families – more than 80,000 people – struggling to survive across the state. And far too many adults in our state do not have the work skills needed for the 21st century economy.

Now is the time to invest in the long-term economic viability of New York. We need to invest in pathways out of poverty and up the economic ladder for all our fellow citizens, including strong public education from pre-K to college. And, we need to invest in the fragile bridges, tunnels, waterlines, public buildings, and roads that we all depend on. These human and physical infrastructure investments will pay off in the creation of new jobs, a workforce prepared to fill them, and a reduction in the extreme income inequality that currently exists in our state.

The question is: how do we pay for those investments? In the spirit of shared sacrifice, we, the undersigned, call for a balanced solution that includes maintaining, expanding, and making permanent the top marginal income tax rates for upper-income New Yorkers, like us, who can afford to pay more. Specifically, we urge the Governor and the Legislature to implement the “1% Plan for New York Tax Fairness”, which calls for new marginal rates of 7.65%, 8.82%, 9.35%, 9.65% and 9.99% for brackets starting at $665,000, $1 million, $2 million, $10 million and $100 million, respectively. The 1% Plan would generate much-needed revenue and address New York’s worst-in-the-nation income inequality.

The current millionaires’ tax brings in approximately $3.7 billion per year from those of us most able to pay taxes; the Fiscal Policy Institute’s 1% Plan would bring in an additional $2.2 billion in revenue above the current surcharge. Given the unmet education and infrastructure needs in our state and the likelihood of major federal funding cuts in the near future, it is critical that New York enacts and makes permanent a more progressive income tax structure.

We also support the plan recently advanced by the Assembly that offers a similar approach, with new brackets starting at $1 million and rates ranging from 8.82% to 10.32%

As New Yorkers who have contributed to and benefited from the economic vibrancy of our state, we have both the ability and the responsibility to pay our fair share. We can well afford to pay our current taxes, and we can afford to pay even more. Our state needs to invest this revenue in our struggling schools, in anti-poverty measures and in infrastructure improvements. Our state’s long‐term economic prosperity depends on strong investments in our people and our communities.

Everyone does better when everyone does better. We urge Governor Cuomo and the New York State Legislature to expand the current millionaires’ tax and ensure that upper-income New Yorkers like us keep doing their part to invest in our state.

Signed,

Sonia Alexander, NYC * Marc Baum, NYC * Elyse Arnow-Brill and Joshua Arnow, Pound Ridge * Lawrence B. Benenson, NYC * Roy Berberich, Mineola * Richard Berkenfeld, Bayside * Steven Berkenfeld, Melville * Leonore Blitz, NYC * Jessica Brackman, NYC * Polly Cleveland and Thomas Haines, NYC * Debra Cooper, NYC * Arthur Cornfield, NYC * Louis B. Cullman and Louise Hirshfeld Cullman, NYC * Pierce Delahunt, NYC * Anne Delaney, NYC * Abigail Disney, NYC * Edith Everett, NYC * Eileen Fisher, Irvington * Barbara Fleischman, NYC * Sarah Frank, NYC * Rosemary Faulkner, NYC * Bob Fertik, NYC * Dr. Gail Furman, NYC * Elspeth Gilmore, NYC * Steven & Mary Goldring, NYC * Adelaide Gomer, Ithaca * Daniel Greenberg and Karen Nelson, NYC * Agnes Gund, NYC * Catherine Gund, NYC * Leo Hindery, Jr., NYC * Polly Howells and Eric Werthman, Glenford * Lawrence Hui, NYC * Marion Hunt, NYC * Craig Kaplan & Anne Hess, NYC * Sarah & Victor Kovner, NYC * Robert Krinsky, NYC * Dal LaMagna, NYC * Ruth & David A. Levine, NYC * Michael A. and Ann Ross Loeb, NYC * Helen Lowenstein, Larchmont * Joshua Mailman, NYC * James & Jacqueline Mann, Mt. Kisco, NYC * Mark Nelkin, NYC * Jan Nicholson, NYC * Susan Ochshorn and Marc I. Gross, NYC * Chet and Karen Opalka, Averill Park * Morris Pearl, NYC * Richard Perl, NYC * Seth Perlman, NYC * Karen Pittelman, NYC * Mark Reed, NYC * Sophie Robinson, NYC * Steven C. Rockefeller, NYC * Sandra Rothenberg and David Ryder, Rochester * Darius A. Ross, NYC * James & Laura Ross, NYC * Martin Rothenberg, Syracuse * Deborah Sagner, NYC * Lindsay Shea, Germantown * Sandra Siegel, NYC * Daniel A. Simon, NYC * George Soros, Katonah * Lynn Stern, NYC * Sarah Stranahan, NYC * Peter Strugatz, East Hampton * Ariane van Buren, NYC * Tanja Wechsler, NYC

Times Union Opinion: Expand tax credit for low-income workers in New York

By Ron Deutsch and Reg Foster, Commentary

Published, Albany Times Union 5:25 pm, Wednesday, March 15, 2017

A young woman juggling an entry-level administrative job and classes at a community college; a divorced dad working 40 hours a week as a custodian to help support his two kids; a veteran trying to make a living back home after serving our country overseas: They, and millions of other hard-working Americans, struggle to make ends meet because their jobs pay low wages.

In fact, 466,000 workers in New York not raising children in the home — and 7.5 million workers across the nation — are currently taxed into or deeper into poverty, largely because they are left out of the Earned Income Tax Credit that families with children in the home receive. Once taxes are taken, many are actually left below the poverty line.  (read more)

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