Governor Cuomo: "That tax reform had one set of rules for red states, one set of rules for blue states. And my point is we have to fight it with every ounce of energy in our body. Because it penalizes all New Yorkers."
Earlier today, Governor Andrew M. Cuomo delivered remarks at the Business Council of New York State's 2018 annual meeting.
AUDIO of Governor Cuomo's remarks is available here.
PHOTOS of the event are available on the Governor's Flickr page.
A rush transcript of the Governor's remarks is available below.
Thank you. Thank you very much. Good morning to all of you. It's my pleasure to be here. I don't feel guilty keeping you indoors today, because you really don't want to be out on the lake just yet—it's a little rainy. Let me begin by thanking all of you for your partnership and your collaboration over the past few years, we've done great work together.
Heather Briccetti is a superstar, let's give her a round of applause. Lifesaver is in the job description of the Governor, I want you to know. I get extra pay for it. Eric Mower who has been great to work with and has been creative and a great partner, thank you. We acknowledged all the other state officials who are here, but our economic development Czar, Howard Zemsky, who runs the REDCs, and so many of you here have been helpful with the REDCs, so I want to thank Howard Zemsky very much.
And Bob Duffy who did his public service and then some as a great, great Lieutenant Governor Bob Duffy, it's a pleasure. And my Legislative colleagues, Betty Little is here and she is just phenomenal to work with as a partner. I want to thank her and John McDonald and Carrie Woerner, thank you all very much for being here. This is their accomplishment that we're talking about today, so thank you. And I know some of you are a little partial to Republicans so I have my Budget Director who is a lifelong Republican, a theft from the Senate Finance Committee. So, you've had favorable feelings about the budget, I owe that to the Republican who I stole from the Senate, Rob Mujica thank you for being here.
Let me talk a little bit about the state. Three questions: where we were, where we are, where we're going. These are good generic questions. They're good questions if you're interested in state policy. They're also good questions if you are lost in a car somewhere, or if you are in a confused personal relationship you can use these questions. Where were we, where are we, where are we going, you can apply them to many situations. Where we were in the state, when we started this state was in trouble. We had a $10 billion deficit, the government was dysfunctional, we couldn't pass a budget, we had high spending--chronic high spending.
The state was an economic dinosaur. I had been in Washington for eight years. I was the HUD Secretary, which is primarily an economic development lender, and all these states are coming in pitching businesses, pitching ideas, New York never showed up. They just never showed up. And we had the problem in Upstate where the economy shifted on us, but then we had a dated mentality. Businesses today are a national or an international competition to keep and attract. No business just happens to locate in a state or happens to stay in a state. They are all pitching and competing with every other state. I can't tell you how many times a day I get a call from business that says "North Carolina just called me and they offered me this." Businesses that are shopping locations, Amazon is a big example of it, but they basically say, "look I can bring X thousand jobs. What state makes me the best offer?" And that is the way states now have to compete for businesses. New York didn't even get that.
And the New York State government just—they thought New York ended at the Bronx. You know Upstate New York, that was anything north of the Bronx and the political reality was two-thirds of the Legislature is from New York City and Long Island. So, they ignored Upstate New York. Yes, because the Legislator's mentality is I want to do for my district; that's how they think. Betty Little's worried about her district. When you have two-thirds of them from New York City or Long Island, don't be shocked when the state government becomes blind to the needs of Upstate New York.
Where are we? Step one was get government spending under control. The formula is simple: you want to lose weight? Eat less food. That is the formula. It's become a billion-dollar enterprise, but that is the formula. If you take in more calories than you burn, you are going to gain weight. If a state government spends a lot of money, you are going to have high taxes. The answer is spend less money. That also applies in many situations in life. I'm working on this with my daughters right now to no avail. Luckily, I had more success in the state than I've had in my home. We said we were going to propose a state spending cap of two percent. People said it's impossible, you can't get spending down to two percent.
Because the political process, the legislature, local politicians, they like to spend. Why? Because they're in the business of saying "yes," right? Businesses have the economic discipline of knowing what they can spend. In government there's always other people's money, so it's always easy to say "yes." We said we would get spending down to two percent. And people said it was impossible, people had proposed it before and they thought it was just pure political rhetoric. We actually did it. Because the fundamental problem for New York was we were eating more than we should've eaten for 50 years, and that's why we put on weight. We were spending more money for 50 years than the people in this state were earning. New York taxpayers feel like you're putting your hand deeper and deeper into their pocket, because we were! It wasn't a perception issue; it was a reality issue. New Yorkers spending about seven percent more every year, income was going up 6.2, inflation was at the rate of 4.1. You cannot do that! You just can't sustain it. And that's why businesses and people were taking off.
Well I'm a Democrat, you Democrats like to spend money, I can see it in your eyes, the cynicism. Forget the labels. Nelson Rockefeller, Republican, 11 percent more year to year. Hugh Carey, Democrat, 7.9 percent more year to year. Mario Cuomo, God rest his soul, 6.9 percent more year to year. "Oh, those Democratic liberals they're killing us, let's get a Republican conservative." OK. George Pataki 5.2 percent year to year. What's the difference between a Democratic liberal, and a Republican conservative? One point seven percent, year to year. And these were over 12 year terms. So much for political labels. We come in, we said we had to get spending down, it's out of control, I mean it, I mean it, I mean it, we're going to do it. One point four percent over eight years. That my friends, is the difference in the trajectory of the state of New York, in a nutshell. We have reduced spending to an all-time low. All time low. And we didn't sacrifice government efficiency, and we didn't sacrifice government function, we have a more active state government than we have seen, I would say, in 50 years. But, the business community was right. Why can't you do it more efficiently, more effectively, why can't you cut the waist, why can't you manage it like a business, why does it have to be a bureaucracy? The management is hard, it's time consuming, it's tedious, but we did it. And we have the spending down, but we have the functionality way up. We also brought down the state debt to record levels, the credit rating agencies responded, all across the board, by raising the state's credit rating. Because we were able to control spending, and we could lower taxes. Every person in this state, pays a lower tax rate today than they did the day I was elected. Every person in the state. Every rate is down. Middle class up to $300,000 lowest rate since 1947, manufacturing rate lowest levels since 1917, corporate rate, lowest rate since 1968. Spend less, you can tax less.
We've also taken on the greatest driver of taxes which is property taxes. Drives me crazy, they say New York State is a high tax state. FDR, also would just get very excited about this. Technically yes. But it's deceptive. It's a high tax property tax, state. Our state taxes are just about in the middle of the country. It's the property tax that is a killer in New York. Average tax payer pays 4,800 in property taxes 1,800 in state income taxes. It's the property tax. Local businesses, average business, seven billion, collected in state taxes, 21 in property taxes. It is the property taxes that have been the problem. So we did a two percent in state spending cap, first time ever two percent property tax cap. The property taxes, depending on where you were in the state, were going up five, six, seven, eight percent every year. More than the state spending was going. No connection to anything. Home values weren't going up, income wasn't going up, but they just keep raising those property taxes. And you got that bill, and you had to pay. We said, we're going to pass a two percent property tax cap. Now, everybody said they're going to pass a two percent property tax cap. George Pataki said it, Governor Spitzer said it, Governor Paterson said it. It's very hard to pass, because all the local governments didn't want the cap. They didn't want that fiscal discipline. We actually passed it, we got it done, and it has been working.
Local governments say, "Well, let the state pick up our Medicaid costs," OK? Sounds easy and simple. Medicaid is $7.6 billion dollars. If the state assumes that from the local government, $7.6 billion dollars, well where does the state get 7.6 billion dollars? That's just a shell game. I take a $7.6 billion-dollar liability for them, I would then have to raise state income taxes. And in truth, we have been very good to the counties when it comes to Medicaid because we have frozen their Medicaid costs since 2017. They used to pay 25% of the cost of Medicaid, the cost of Medicaid is down to 12%. Meanwhile we've been subsidizing the difference and I'm still below the 2% cap. Local governments have to realize that they have to manage their government also and they have to find efficiencies and they have to find savings. We have 10,500 local governments in this state. Not every local government has to do everything. Not every local government has to have their own excavation fleet, their own maintenance garage, and their own services. They have to work out savings in consolidations because we can no longer sustain the growth. That is the simple, simple truth. And, they've gotten extraordinary relief from the state.
We also focused on Upstate New York like a laser. Why? Because downstate New York economically was doing ok. They had peaks and valleys but if you look at downstate New York, New York City is a different phenomenon, it's an international city. It was upstate New York that needed help. Upstate New York went through that manufacturing transition and nobody was there to help them. And if you were really thinking about the state in the holistic sense as oppose to a political sense, because my district is the whole state, so I said it makes sense form the states point of view to focus on Upstate New York. We have invested more in Upstate New York than any administration in modern history. $44 billion dollars and I am proud of it. I want that in my eulogy. We did it despite the politics. We frankly had to go to war with the legislature to get that funding to upstate New York, which was not the political funding mechanism and it has made a tremendous difference. The $44 billion, Governor DeWitt Clinton, he did the Erie Canal, cost him $7 million. Today's money $160 million. That compares to our $44 billion. I could stand here before you and say we've done more for upstate New York than any governor. I will however, defer to Governor DeWitt Clinton because his $7 million dollars built that Erie Canal, which was the transformative economic development measure for upstate New York. But second to Governor DeWitt Clinton, I believe our administration has done more for upstate New York than any administration in history and that's Howard Zemsky and that's the whole team and I'd like to give them a round of applause.
We had a different economic strategy also, it wasn't just the money, we administered it differently. We had regional economic development councils because that's how the economy works. We brought in real business people to work with academics, local leaders to work to come up with a real business plan, not fund political projects, fund a business development plan, and then we had a competition to make sure that we got the best. We have 10 economic development regions in the state because we have 10 regional economies. What works for the North Country is different than what works for Long Island and is different for what works for Western New York. So, come up with a business plan for each region by the business community in that region and that's exactly what we've done. And different regions have found different business models that they're pursuing. Photonics for the Finger Lakes. Central New York is investing in drones and doing remarkably well. Southern Tier, clean energy. So, different strategies for different regions. And then look for large employers who can further that industry. And we brought in some anchor employers, large number of jobs, high profile employers, but overall the REDC's have invested in 6300 projects. 6300. Now, I'm not saying all 6300 have succeeded and gone on to great triumph. You find a bank that has invested in 6300 projects. There will always be projects that work and don't work and startups that work and don't work. But these projects have made a difference all across upstate New York. We also on a separate track said the economies that succeed are the economies that are accessible, and modern, and have a transportation network. This nation has been talking about building new infrastructure for every president on both sides of the aisle for the past 50 years.
You know what has happened? Nothing. Nothing. President Trump started, he was going to do a $1.5 trillion infrastructure program, nothing. It's now down to a couple of hundred million dollars over years. New York, we said we're not waiting anymore. We started the most aggressive building program in the United States of America. $100 billion, all state funding.
And we focused on upstate New York. And big facilities, big projects that would transform upstate New York, like a new Rochester Airport, $79 million. I put it first because I just love the colors in the canopy. New Elmira-Corning Airport, new Syracuse Airport, new Plattsburgh Airport, new Ithaca Airport, new Albany International Airport, new airport at Stewart International Airport. New Schenectady Train Station, new Niagara Falls Train Station, new Rochester Train Station, new Woodbury transit hub. $27 billion in roads and bridges. New cashless tolling, downstate and now coming to the Thruway. New Jacob Javits Convention Center, in New York City, was built in 1984, was state of the art. Others have now passed it by. We're doubling the size of the Javits Convention Center. New Albany Convention Center. New Expo Center at the State Fair in Syracuse, which I think is going to be a great economic generator. New National Comedy Center in Jamestown, which is magnificent and is going to drive tourism in Jamestown. New JFK Airport, new LaGuardia Airport, new Long Island Railroad transformation.
More construction in this state than ever before in the history of the state. And we're not planning it, we're not proposing it, we're not trying it, we're not envisioning it, we are actually doing it. We are making it happen, we're making it happen quickly, on time, and in a way that we can be proud of. We've changed the way that we build. Know what you do in life and know what you don't do in life. Government does not build well. It's not what we do. And there's decades of examples that prove that. The private sector builds. We went to a new approach called design build, state will say here's the general design of what we want, bid it out to the private sector, bid it out internationally, let them design it, let them build it, they have an incentive for early delivery, they have a sanction for late delivery. And get out of the way.
We just did the Mario Cuomo Bridge, largest infrastructure project in the United States of America. The Mario Cuomo Bridge, $4 billion. We thought it was going to be $5, we bid it internationally, it came in at $4 billion. We opened it on time, on budget, and saved money. So we not only are talking about doing it, we're doing it right, we're doing it efficiently, we're doing it effectively, and this bridge is a model of what can be. This is across the Hudson River, it replaces the old Tappan Zee Bridge. They talked about replacing the Tappan Zee for 20 years. Literally. Every Governor got up and said, oh it's dangerous, it's falling down, we have to replace it. And they traumatized two generations by the way. They traumatized me. Because they would say it's dangerous, and then for those of you that drove across the old Tappan Zee, there would be these metal plates in the Tappan Zee that were like covering holes, I swear. And you'd see the vehicle ahead of you go over the plate, and the plate would jump, just a little bit. And you would see a little light through the plate, and you would say, so you would have to go through this whole mental exercise, take off my seatbelt, what do I do, do I jump out early, do I wait for the car to sink. It was terrible. 20 years of it. Now we have the new bridge.
The strategy is working. You can read it in newspaper reports. Buffalo was a major focus for us. Why? Because Buffalo was the poorest, slowest economy in the state, on the numbers. And we said let's start with frankly the toughest case, which was Buffalo. And we turned Buffalo around. It is a different place. On the numbers, psychologically, on the face of people. And business development has a psychology to it. When people believe a place is declining, they leave. When they believe it's on the upswing, they invest. And Buffalo is now on the upswing. The articles about Buffalo as the turnaround city, it has won national repute in turnaround. And it's not just on the faces and in the newspapers. It's in the numbers.
We created 1,000,000 jobs. New York State today has more private sector jobs than it has had in the history of the state. Period. Period. 8.1 million jobs. We've never had this many private sector jobs before in any economy. Unemployment went from 8.5 to 4.2, and the recovery was statewide. In the old days, you would see New York City doing very well, and upstate New York struggling. Look how even the recovery is all across the state. That's thanks to the upstate effort. That brought upstate success close to what's happening in downstate. And the wages are growing double the rate of inflation. So it's not just that were creating jobs that are low wage jobs. These are jobs that have a career path that are increasing. Where are we going from here? Number one - the economy comes to the states with the skilled workers. We're in a position now where every company is saying the exact opposite. They can't find the skills. We have the jobs, we have the employers that can't fill them because we need the skills. The economy will come to where they can find the workforce. We have a free college tuition programs, we have one of the most educated workforce in the country if not on the globe. We have to do more in this state on commercialization. Why did Silicon Valley get ahead of us? Why did the research triangle get ahead of us? They were better at commercialization, they were better at taking that great mind that came out of academia with an interesting idea and converting it, commercializing it, nurturing it with entrepreneurship. They did that better than us. It was part of us being a dinosaur and we didn't understand that government was supposed to be a facilitator. We have to do a better job on that and we have to train out workforce. We have $175 million training program because we have the jobs. We now have to educate the workforce. Continue the building program. We have a head start on every state in the United States. The federal government is doing nothing.
We're going to have new airports, new trains, new roads, and new bridges. I don't want to fall behind. I want to continue to lead. I want to increase our building program from $100 billion to $150 billion. We've shown that we can do it and we can do it well and it's an investment and an airport is not just an airport anymore, it's not where people go to leave to go on vacation, it's where people come to have a business meeting. It's a totally different facility. And you fly around the world and you look at these international airports and then you fly into an airport in the United States and it's embarrassing. Last new airport in United States, 25 years ago. Denver airport, 25 years ago. LaGuardia, JFK, Rochester, all those airports I showed you, they're not only going to be the newest in the state, they're going to be the newest in the United States of America. No state is doing what we're doing.
Attract millennials. Millennials are different. They are not me in many ways. My generation, the dream was you move out to the suburbs, you get a house, you get a two car garage, you get a backyard, a barbeque, you put up a fence, and you're all set. The millennials don't want to move out to the suburbs, they want proximity, they want downtown. Howard Zemsky does this speech how he's cool and he knows what's cool and he builds cool. I don't think he's cool and I don't think he knows what cool is but that's ok. We all live in our own reality but he is right that downtown is where the millennials want to be. They want to be able to walk to the café shop, they want to walk to the restaurant, they want to be able to walk to work, they don't want to get in the car and drive anywhere. It's all and that plays right to us because we have magnificent downtown areas. We have history, we have geography, we have architecture, we have everything and that U-turn on the development highway is great for us. Environmentally it's good it reduces sprawl and we have that downtown asset. So we have the academic universities, we have the jobs, we have the skills, we have the transportation and we have the places they want to live. We just have the redevelop them. We have been, we have to continue to.
Third; a driver in the economy is going to be renewable energy. I will bet you dollars to dollars. We have to do it. Climate change is real. People believe it. The rush is to renewables, everybody talks about it, the problem is nobody is doing it. Everybody has a goal for renewables. I want to be 100 percent renewables in the next two years. Nice. Where do you get the renewable energy? Where does it come from, what is the technology, who's building the solar, who's building the turbines? That's what we should do here in the State of New York. We're the largest investment in the country to do that. The green economy and green jobs, and we should own it. We're also going to be the first state to have 100 percent high speed broadband coverage, which means you can be anywhere upstate and you can be just as competitive as if you're sitting in downtown Manhattan or downtown LA because if you're on the internet and have high speed internet you can be anywhere and it's a problem for rural communities and underserved communities across this country. Now just in this states and that is going to be the great equalizer and we're going to be the first state there. Next year's agenda, we also want to continue the 2% spending cap.
That is the discipline that has worked. Only intake 2000 calories a day. If you do that, good things will follow. It's very hard to do. It requires discipline, but the 2% spending cap drives everything, and the 2% property tax cap. 98% of the local governments are following it. Everybody rebels against it, again because politicians are in the business of saying yes.
Yes. I'm a little different as a politician that I believe no is actually the right answer when it's the right answer. But keeping that spending discipline, continuing the robust investment in Upstate New York, because we are making up for 50 years of abandonment of Upstate New York. Let's be honest, Albany turned its back on Upstate New York 50 years ago. And Albany was nowhere to be found when upstate was going through that transition, so I have no problem going to that legislature and saying you're right, I want to invest billions in Upstate New York because we're making up for a past mistake that was short-sighted and hurt the entire state.
Additional investment in skilled workforce training, we have a women's rights agenda, gun safety red-flag bill, campaign finance reform, ethics reform, criminal justice reform, Child Victim's Act, voting reformit's crazy that voting is so hard in this state. Why do we make it hard to vote? You want civic engagement? You want civic involvement? Make it easy to vote. And expand Excelsior Scholarships, which is right from a democracy point of view. Also, you want an informed workforce.
What is the bottom line? Private sector bottom line? Historic spending lows, historic economic development in Upstate New York, highest number of private sector jobs in the history of the state, taxes at historic lows, debt down, credit rating up, leading the nation in rebuilding, young people coming back to Upstate New York. Young people coming back, after 40 years of leaving. That is the bottom line of what we have done together. My friends if I had said to you on day one, this is what we're going to do. You would have said it's impossible, it's too ambitious. It's been tried before and failed. You'll never get the legislature to do it. You can't turn the economic cycle. That's what we would have said. That's what I would have said. These results are more than I think any of us had a right to hope for. I credit the partnership. I credit the collaboration. I credit all the time and energy you put into those Regional Economic Development Councils. I credit your help with me, with the legislature, banging that bell saying Upstate New York needs help. And I know it's not politic, but that's where the need is and let's do the right thing. Every arrow is pointed in the right direction; we just have to keep it going.
One caution sign. That's the good news. The bad news is this, the Federal Government passed the tax reform bill last year. Donald Trump passed it last December. It gave a tax cut, 83% went to the top 1%, I don't want to argue that. In having that tax bill, a provision that ended State and Local Tax deductibility. It was technical, sounded confusing, nobody paid attention. It is devastating to the State of New York. Devastating. What is says for the first time, is you can no longer deduct your state and local taxes from your federal income tax. First time since the income tax was started in 1861 by President Lincoln, where it specifically said the federal tax will be levied after state and local taxes. President Lincoln said that. This changes it, and this says you can pay your state tax, but the federal government is then going to tax your tax. In other words, you pay $20,000 in property taxes. Right now, you deduct that from your income and then you pay your federal income tax on the remaining. They're going to tax your property tax and they're going to tax your state income tax. That's a 20-30% increase overnight in property taxes! And that's a 20-30% increase depending on your bracket on state income taxes. And we've been working for seven years to cap property taxes, reduce state taxes. Overnight, they raise them 20-30%.
Why? Because they needed to find revenue to pay for the tax cut. So where did they find the revenue? By finding this source of ending deductibility. Ronald Reagan tried it, got knocked on his rear end when he tried it. But politically something changed. The states that have the state and local taxes, property taxes, tend to be all democratic states. Republican states, red states, have different types of taxes. Value added tax, property transfer tax, but they didn't tax those taxes. They taxed 12 states. All Democratic, all states that Trump lost. The state that pays the heaviest price, State of New York. We pay an extra $14 billion a year. To add insult to injury, New York State already is what they call the number one donor state to Washington. We spend $48 billion, more to Washington than we get back.
Senator Daniel Patrick Moynihan, God rest his soul, used to rail about this all the time. That we send much more to Washington than we get back. This is devastating to our long-term economic survival. The calls I get, the calls Howard Zemsky gets, they say North Carolina offered me this, what can you offer me? They just made that competition impossible. Because North Carolina got just the tax cuts. We got the tax cuts offset by our tax increase by now not allowing deductibility of state and local. It will structurally long-term the economic competitiveness of this state. Now, I don't want to get into national politics, but the polarization of Washington, the divisiveness of Washington—racial division, religious divisions, political divisions, this is an economic civil war. That tax reform had one set of rules for red states, one set of rules for blue states.
And my point is we have to fight it with every ounce of energy in our body. Because it penalizes all New Yorkers. It doesn't say Republican New Yorkers or Democratic New Yorkers or Upstate New Yorkers or Downstate New Yorkers, it penalizes every New Yorker. And what I am saying to our Congressional Delegation and our Assmeblypeople and our Senators—I don't give a darn what party you belong to. I really don't. This is not about party politics. This is about your Constitutional responsibility. This is when you raise your hand and you take your oath and you say I am going to represent you, that comes first. And how can you ever act in a way that is averse to the state? We have Congresspeople who voted for the tax bill. How can you vote for a bill when you know that bill penalizes your state? Well I like the rest of it. Except it hurts your state, there is no rest of it. It's a pain to your state. How can you do that? It violates literally your fundamental oath and your fundamental responsibility. We have to say to every politician on both sides of the aisle, Democrat or Republican, you're a New Yorker first. And stop the polarization and stop the politics and stop the division and stand up and fight as one for your state. If the Democrats and the Republicans work together, they can repeal this SALT. They can. They just have to get past their own politics and put their on ego aside. And act in the best interest of the people of this state.
I'm a Democrat. But I am a New Yorker first. And I am the Governor of New York first. And I represent all the people of New York first. And I don't discriminate against one group or another. And if it ever comes before my Constitutional obligation and my party loyalty, my Constitutional obligation will win every time and it's not even a competition. And I need your voice with us demanding that responsibility from every elected official. Vote in the interest of your state. Stop the politics, stop the division. We need to solve this because all the arrows are up and this is the only caution flag in the way. Thank you and God bless you.