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Taxes: New Yorkers flee to less­expensive states
Jeff Platsky, [email protected]
7:06 a.m. EDT May 11, 2016
Lynn Fahlen owned a home in a New York hamlet so appealing it could have been on the cover of a tourism
guide.
Just the name — Groveland — produced visions of verdant rolling hills nestled in the middle of the state’s
agricultural hub. Her residence sat on the western edge of New York’s picturesque Finger Lakes region, a
short drive from the state’s notable wineries and pristine waters of Conesus and Hemlock lakes.
But the 52­year­old uprooted herself, her horses, dogs and cats to move to Sagertown, Pennsylvania, 180
miles southeast of her former home.
“Oh my God, what a difference,” Fahlen said.
(Photo: Submitted)
OVERVIEW: Taxes are too damn high (/story/news/education/2016/05/11/highly­taxed­burbs­go­
school­polls­tuesday/84142840/) TAX CAP: What you should know (/story/news/education/2016/05/11/new­york­tax­cap/84194230/) The New York native is talking taxes — New York’s burdensome property taxes. Her tax bill is now 60 percent less, from $5,000 a year to $2,000.
Fahlen is part of a growing middle class that, along with aging baby­boomers, is fleeing New York, according to state and federal records reviewed by
Gannett New York.
Residents say they are being driven out by some of the highest property taxes in the nation and higher than average income taxes that, even though
recently lowered, still rank in the top half of the nation.
LOHUD
Proposed 2016-17 school district budgets in Westchester,
Rockland and Putnam | lohud.com
(http://data.lohud.com/embeds/proposedbudget/)
School taxes represent the largest portion of a property­tax bill: about 60 percent of the total annual tab. And New Yorkers will head to the polls
Tuesday to vote on their school budgets.
The flight is especially acute in the economically depressed upstate region.
Leaving NY
Forty­one of the 50 upstate New York counties lost population between 2010 and 2015, according to U.S. Census Bureau estimates. Fahlen’s former
home, Livingston County, lost 1 percent of its population, nearly 600 people. But that loss pales in comparison with Jefferson, Sullivan and Tioga
counties, all of which saw about one in every 25 residents depart.
“I just don’t care what (Gov. Andrew) Cuomo says, people are moving out in droves,” Fahlen said. “The numbers don’t lie.”
Out-Migration Income loss for NY State
6.0
Net Adjusted Gross Income (in billions)
5.5
GET THE NEWS
5.0
4.5
4.0
3.5
3.0
2.5
2.0
2009-10
2010-11
2011-12
2012-13
2013-14
Federal Fiscal Year
Loss to Other States
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Share
Heading out of town (AGI Loss) (https://infogr.am/2c6c090b­ff4a­45f6­8002­
644b9cb85da9)
Create line charts (http://charts.infogr.am/line­chart?
utm_source=embed_bottom&utm_medium=seo&utm_campaign=line_chart)
Between 2009 and 2014 the state lost more than $22 billion in wealth, according to data compiled by the Internal Revenue Service. The pace
quickened in 2012 through 2014, when New York saw residents with $11 billion in total income flee the state.
From 2011 to 2013, New York led the nation in the number of exemptions lost (342,000) and the decline in the number of tax returns filed (159,000),
according to IRS data. In fact, between 2012 and 2013, three counties in southern Florida — Palm Beach, Broward and Miami­Dade — drew $1.2
billion in income from New York.
REBATES: 5 state programs explained (/story/news/education/2016/05/11/ny­tax­rebates/84196960/) STAR: Program changes Q&A (/story/news/education/2016/05/11/star­exemption­changing/84199454/) REPERCUSSIONS: Tax­cap consequences (/story/news/education/2016/05/11/school­aid­increases/84179936/) There is nothing new about state residents migrating elsewhere. New York has been losing population since 1960: 7.3 million people, based on
Census figures. No other state has lost more.
The only reason New York has had an overall increase in population is an influx of immigrants. The state had nearly 19.8 million people in 2015
— fourth in the nation.
In 2014, Florida surpassed New York as the third most populous state. And in 2015, Florida had 475,481 more people than the Empire State – three
times the gap just a year earlier. (/story/news/politics/politics­on­the­hudson/2014/12/23/ny­falls­behind­florida­in­population/20805031/)
The drop has meant a decline in congressional representation and could affect federal aid.
Not just sunny skies
Why the exodus? Not the weather alone, but that certainly appears to plays a part.
Florida is beating New York in population. (Photo: USA Today)
Financial advisers say that, even though some families are reluctant to leave loved ones in New York, for many it comes down to a simple financial
equation. Taxes, foremost property and income, combined with a lackluster upstate economy, are driving many out.
Even Cuomo acknowledges that local property taxes weigh heavily on the pocketbooks of New York residents.
“The main problem with state taxation is property taxes,” Cuomo said during a recent presentation to upstate New York newspaper editorial boards.
“People say state taxes are high. That’s bogus. State income taxes are higher than the median, but we’re not the highest. Our property taxes are out
of control.”
DATABASE: School administrator salaries in NY (http://lohud.nydatabases.com/database/administrator­salaries­ny­school­districts) CHECK YOUR DISTRICT: Educator salaries in NY (http://lohud.nydatabases.com/database/educator­salaries­new­york) DATABASE: Teacher pensions in NY (http://lohud.nydatabases.com/database/teacher­pensions­new­york) FIND YOUR DISTRICT: School tax levy report cards (http://lohud.nydatabases.com/database/school­tax­levy­report­cards) A 2 percent property tax cap installed in 2011 has been holding rising property taxes in check in recent years (/story/news/politics/politics­on­the­
hudson/2016/01/20/schools­property­tax­cap­year­012/79052434/), but previous years of unchecked increases have made the state unaffordable for
the middle class and unattractive for wealthy retirees.
Residents are feeling the impact on their family finances.
“We miss the people, not the place,” said Peter Austin, who moved from Broome County to northwest Georgia. “It just seems that you make more and
have less going out, by far.”
The 38­year­old relocated his wife and two daughters from the Southern Tier to a community that is reputed to have among the top school districts in
Georgia. He paid $4,800 a yeary in property taxes in New York. Today, the same bill in Georgia totals $800 for a $83,000, three­bedroom home.
Property taxes on a similarly priced home he was considering in Alabama were $200.
Impact on older residents
Retirees, particularly those with higher incomes, often find the lure of lower taxes too much to pass up.
Based on an AARP survey, 56 percent of New Yorkers worry about affording property taxes in retirement, and 51 percent say high utility costs also
factor into the relocation decision.
Private pensioners, in particular, have an incentive to pick up stakes. While public employees' — government, military, school district — pensions are
exempt from state taxes, that’s not the case with private pensions. Only the first $20,000 is free from the state tax bite for those 59 and older. Anything
over that is taxed at the applicable state income­tax rate.
State Sen. Hugh Farley, R­Schenectady, has legislation to double the tax exemption for private pensions to $40,000 in phases to dissuade at least a
portion of those thinking about relocating.
“Pensioners are heading to Florida and other places with their whole pensions, and that’s significant,” said Farley, 84, who, too, is retiring from the
Senate this year (/story/news/politics/politics­on­the­hudson/2016/05/03/nys­longest­serving­senator­retiring/83866088/)and has a home in Florida.
He’s been collecting a salary and a pension (/story/news/local/watchdog/2013/05/15/albany­pensions­state­workers/2161567/) from his legislative job.
Boomers are worried about having enough money in retirement, AARP’s survey found, pointing that, when they retire to other states, it cripples the
economy — particularly the aging upstate region.
“We need to keep New Yorkers in New York when they retire,” said William Ferris, legislative director for AARP in Albany.
NY solutions
Enhanced STAR property­tax discounts can trim the bill for seniors with adjusted gross incomes of $84,550 — based on a 2014 tax return — or less.
For many seniors, the exemption is most welcome, but the earnings ceiling also closes off some older upper­middle­class taxpayers from the benefit,
giving them added incentive to relocate.
Fifty­five percent of boomers said they expect to relocate out of New York in retirement, while 66 percent of the Gen­X population are seriously
considering the move, AARP said.
For Fahlen, she bought an existing Pennsylvania home for $325,000; She sold her old home for $200,000.
Even with a more expensive residence and a more acreage, her property tax bill was trimmed.
“A large percentage of the people I work with are looking to sell and move to states that are more retirement friendly,” Fahlen said. “They want to get
the most bang for the buck and not spend all their money paying for government services they don’t use.”
Twittter: @JeffPlatsky
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