ALBANY, N.Y. – A newly released statewide study is sounding the alarm that New York must address persistent business-climate challenges or risk continued economic decline compared to faster-growing states. The 77-page report, commissioned by the Public Policy Institute of New York State and produced in partnership with the New York State Economic Development Council, outlines urgent reforms aimed at taxes, regulations, permitting, workforce, and energy reliability.
The findings come after a yearlong effort involving more than 500 business leaders and over 40 associations through regional forums and surveys. Participants painted a troubling picture of declining competitiveness and rising costs of doing business in the state.
Long-Term Declines
New York’s share of the national population has slipped from 9.8 percent in 1950 to just 5.8 percent today. The prime working-age population has fallen by nearly 800,000 since 2005 and is projected to continue shrinking. Job growth also trails national averages: New York added 7.3 percent over the past decade, compared with 12 percent nationwide, 24.9 percent in Florida, and 20.3 percent in Texas.
Key Sectors Lagging
Financial and white-collar industries that once anchored the state economy are expanding more slowly here than elsewhere. Insurance jobs declined by 3.4 percent in New York over the past decade, while the sector grew 20 percent nationally and more than 50 percent in Florida and Texas. Professional, scientific, and technical services grew 14.4 percent in New York, about half the national pace, while management positions increased just 3.6 percent compared with 20 percent nationwide and nearly 64 percent in Texas.
Costs and Complexity
The report identifies nearly 300,000 state regulatory restrictions, the second-highest in the nation, and more than 24,000 bills filed during the last legislative biennium – roughly five times the U.S. average. Businesses described this volume of rules and legislation as a drag on growth and a source of uncertainty.
Survey results reflect that sentiment: only 21 percent of respondents believe New York is on the right track. The business-climate satisfaction score came in at just 1.98 out of 5, the lowest among measured items. Top priorities cited by employers include reducing regulations, lowering business taxes, strengthening business retention and expansion efforts, and addressing energy capacity and cost concerns.
Recommendations for Action
The report urges Albany to take immediate steps, including:
- Launching an AI-assisted review of state statutes and regulations to remove redundancies and conflicts.
- Re-establishing a regulatory reform office to oversee the economic impact of agency rules.
- Modernizing permitting processes and the State Environmental Quality Review Act to speed housing, manufacturing, and energy projects.
- Repealing the state’s Scaffold Law to reduce construction insurance costs.
- Prioritizing programs that keep existing businesses in New York while targeting new growth.
A Warning Backed by Data
The release comes as independent surveys show similarly weak sentiment. The New York Federal Reserve’s April Business Leaders Survey recorded a business-climate index of -60.7, among the lowest readings since 2021. Taken together, the indicators suggest that without swift action, New York may see further erosion of its economic base.
Snapshot Quick Facts
| Category | Detail |
|---|---|
| Report | Blueprint for New York – Creating a Roadmap for Change |
| Commissioned by | Public Policy Institute of New York State, with NYS Economic Development Council |
| Method | 1-year project; 500+ business leaders; 40+ associations; statewide forums |
| Population share | 9.8% (1950) → 5.8% (2024) |
| Job growth (10 yrs) | NY +7.3% vs. U.S. +12%, FL +24.9%, TX +20.3% |
| Regulations | ~300,000 state restrictions (No. 2 in U.S.) |
| Legislation | 24,195 bills filed in 2023–24 (≈5× national average) |
| Survey results | 21% say state is on right track; business-climate score 1.98/5 |
| Top fixes | Regulatory and tax relief, retention/expansion, energy reliability |
Additional Indicators of Concern
- Migration & Population Loss: New York continues to rank among the top states for resident outmigration, with hundreds of thousands leaving each year for lower-cost states such as Florida, Texas, and the Carolinas. This steady population decline reduces both the tax base and available workforce.
- Tax Climate Rankings: The Tax Foundation’s State Business Tax Climate Index currently ranks New York 49th out of 50 states for overall tax competitiveness, underscoring the heavy fiscal burden businesses face.
- Housing & Cost Pressures: High housing costs, combined with restrictive zoning and lengthy permitting processes, make it harder for workers to live in the state and for companies to attract and retain talent.
- Energy Reliability Risks: Analysts warn that New York’s rapid transition away from fossil fuels and nuclear power without sufficient replacement capacity could lead to higher energy costs and reliability concerns, creating uncertainty for manufacturers and large employers.
- Small Business Sentiment: Surveys of small-business owners consistently highlight taxes, regulations, and economic uncertainty as top challenges, aligning closely with the statewide competitiveness study’s findings.
Taken together, the data and warning signs suggest that without bold reforms, New York risks falling further behind its peers in growth, jobs, and competitiveness.
Q&A
Q: Who produced the study and why?
A: The Public Policy Institute, affiliated with The Business Council of New York State, commissioned Economic Leadership LLC to assess competitiveness and craft reforms after extensive forums and surveys.
Q: What immediate steps are recommended?
A: Streamlining regulations, reducing business taxes, modernizing permitting, repealing the Scaffold Law, and focusing on business retention and expansion are all highlighted as top priorities.
Q: How does this align with other economic signals?
A: Independent surveys, including the New York Fed’s Business Leaders Survey, confirm weak sentiment and show business leaders view the current climate as one of the toughest in the nation.
Q: How does New York compare to peer states like Florida and Texas?
A: Over the past decade, New York’s job growth was just 7.3 percent, compared with 24.9 percent in Florida and 20.3 percent in Texas. Both states also experienced stronger growth in insurance, professional services, and management jobs, while New York either lagged behind or lost ground.
Q: What are the potential consequences if New York does not act?
A: Without reforms, analysts warn of continued outmigration, weaker job creation, and declining competitiveness. Employers may increasingly shift investment, expansion, and hiring to states with lower costs and more predictable regulatory environments.
