If you watch the Sunday morning talk shows or cable news, you might have seen some ads from the folks at New York’s economic development agency, the Empire State Development Corp. Several friends of mine have seen the ads and have asked me what they’re all about.
The ads are slick and well produced. They might prod you to give New York a look for your next business investment. In fact, part of the ESD’s marketing campaign even includes an Arizona company that moved its operations to New York.
Could it be that New York offers a better business climate than Arizona?
Before you load up the U-Haul (a great company headquartered here in Arizona, by the way) and take your business east, a closer look reveals that Arizona wins hands down in a head-to-head matchup with New York.
Chief Executive Magazine just released its latest rankings of business environments, and for the third year in a row, Arizona was in the top-10. New York clocked in at a dismal 49, earning a one-star rating for its tax and regulatory climate. Only California was worse.
Other rankings are just as depressing for New Yorkers. The Tax Foundation’s 2014 rankings of bestbusiness tax climates put New York dead last. After Gov. Andrew Cuomo signed the fiscal year 2014-2015 NY state budget into law, which brings the corporate income tax rate down to 6.5 percent from 7.1 percent, the Foundation says that it would have slotted New York in at 48. For those keeping score, Arizona’s landmark 2011 competitiveness package is phasing Arizona’s corporate income tax down to 4.9 percent.
The Rich States, Poor States report issued by the American Legislative Exchange Council last monthranked New York dead last for economic outlook and number 35 for economic performance. Again, Arizona was in the top-10 in both categories.
Sensing a pattern?
I’m a native New Yorker and had a great experience growing up in the state. While I am now officially a Diamondbacks fan, I must admit that I sometimes cheer for the Yankees (go Tanaka!), enjoy the offerings of Little Italy and am a great admirer of Rudy Giuliani. But Arizona wins over New York on quality of life alone. Not only is there no polar vortex here, but the entire culture of Arizona is one premised on the ability to make your own way on merit. Add in a state government here that is a model of efficiency compared to Albany and tax, regulatory, labor and legal climates that encourage growth and investment and one almost feels bad for New York.
Arizona might not have a $100 million-plus ad budget and Spike Lee behind the camera to tout its outstanding business offerings, but thanks to Gov. Jan Brewer and a pro-growth Legislature, the state has instituted reforms over the years that have firms from around the globe looking at Arizona. The opposite is true in New York: Lots of money for marketing, but very little in meaningful reform.
But what about that Arizona firm that New York reeled in? Didn’t New York’s supposedly great business environment steal one of our own?
Valutek was in New York back in 2011 after program funding at ASU was lost and as the company sought to be closer to its client base. So it’s hardly a new recruit. And the number of jobs in question is 25. Any job in an emerging high-tech field should be celebrated, but this isn’t on par with Apple’s new Mesa plant and other headlining-grabbing jobs announcements in Arizona expertly quarterbacked by the Arizona Commerce Authority.
I commend my friend Ken Adams, who runs ESD, for making the best of a pretty tough situation. But Gov. Cuomo can buy up all the air time he wants and it still won’t change the poor fundamentals of his state’s business environment.
Arizona’s policy climate is one to be emulated, not New York’s.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce & Industry.