Fix imbalance in flow of LI taxes to state and federal governments

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 governments.

A balance of payments study commissioned by the Long Island Regional Planning Council recently identified an annual deficit of more than $40 billion between the tax revenue generated in Nassau and Suffolk and the return in state and federal government spending in our region. Most alarming in this study, a 10-year update from one conducted by the Long Island Association business group, is that the gap between the tax revenue the state gets from Long Island and state spending in our region more than doubled over that period.

This is not merely a cry for “our fair share.” This is an alarm blaring 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 that produce 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, including roads, bridges, airports and utilities. We are on the eve of 2024. It is absurd that many of the Long Island Rail Road's lines are still not electrified. 
• Technology incubators and STEM Jobs: More educational programs — i.e., K-12, college, graduate and trade school — are needed to train people for high-paying careers in technology and STEM areas in order to help combat the alarming trend of young people moving off the Island and out of state.
• Sewers: More than 75% of Suffolk County is not connected to sewers, and the threat of groundwater and surface water pollution from antiquated cesspools is a public health and environmental concern. Additionally, without sewers, there can be no significant economic development in those areas. The region needs more money for sewer expansion and grants for homeowners for advanced septic systems.
• Affordable housing: The Long Island Regional Planning Council 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). The region desperately needs to develop a robust stock of housing with incentivized investment from our state and federal partners, to keep our young workers here on Long Island where they can continue to contribute to our economy,

Smart businesses support their greatest-producing sectors with heavy investment to ensure that revenue flow continues and even grows. Lawmakers in Albany and Washington should mirror this approach. Continued failure to reduce the serious imbalance between taxes and expenditures in our region 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.

This guest essay reflects the views of John D. Cameron Jr., chairman of the Long Island Regional Planning Council.