LI's Economic Engine Threatened by Imbalance of Taxes and Services

Nassau and Suffolk counties combined have a population greater than the city of Chicago, and a Gross Domestic Product larger than 17 states. Given that our median household income is 161% higher than the New York state’s and 171% higher than the nationwide median, it is undisputed that Long Island serves as a major source of tax revenue for Albany and Washington.

But the economic engine that is Long Island is threatened by the severe imbalance between the tax money we send out and the expenditures made in our region by the state and federal government.

A Balance of Payments study commissioned by the Long Island Regional Planning Council recently identified a deficit of more than $40 billion between the tax revenue generated in Nassau and Suffolk and the return in government spending in our region. Most alarming in this study, a ten-year update from one conducted by the Long Island Association, is that the gap between New York State revenue and spending more than doubled over that time.

This is not crying for ‘our fair share;’ this is an alarm call that Long Island’s ability to continue to generate revenue for Albany and Washington at the level we have been is at serious risk.

While it is understood that many state and federal spending programs are means-based, our elected leaders need to recognize that it is smart policy to invest in the areas which are producing the greatest revenue for them. Long Island has a number of critical needs that are calling out for greater assistance:

• Infrastructure: Being the nation’s first suburb means we have the oldest infrastructure system. We are on the eve of 2024 but is absurd to realize that many of the Long Island Railroad lines are still not electrified.
• Technology Incubators and STEM Jobs: Programs which help create high-paying careers in technology and STEM areas can help combat the alarming trend of young people moving off the Island and out of state.
• Sewers: More than 80 percent of Suffolk County is not connected to sewers, and the threat of nitrogen pollution from antiquated cesspools is not only an environmental concern. Our strong tourism and marine economies derive great benefit from the quality of our surface waters which is being degraded by excess nitrogen runoff.
• Affordable Housing: The LIRPC long ago identified the lack of affordable housing as one of the two major impediments to Long Island’s sustainability (the heavy tax burden being the other).

Businesses will support their greatest producing sectors with heavy investment to ensure that revenue flow continues. Lawmakers in Albany and Washington should mirror this approach. Continued failure to reduce this serious imbalance between taxes and expenditures will likely mean that the next time this report is updated it will find the once vibrant economic engine of Long Island in serious decline.

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John D. Cameron is Chairman of the Long Island Regional Planning Council.