Originally published in Crain’s New York Business April 28, 2014.
On a trip through New York last week, Texas Gov. Rick Perry challenged Gov. Andrew Cuomo to a debate over the business climate of each state. Mr. Cuomo declined the invitation, but told Crain’s that his tax-free Start-Up zones have attracted the interest of Texas companies. Here’s how the Empire State stacks up against the Lone Star State.
Texas’ oil and gas boom has attracted new residents. The state’s population increased 20.9% between 2000 and 2012, to 25 million. New York, meanwhile, grew 2.2% to 19.4 million people.
Don’t mess with taxes
77%: Portion of New York residents who think they pay too much in state taxes, compared with 39% of Texans.
8.82%: Top New York income tax rate. New York corporations pay a flat rate of 7.1%. There are no income or corporate taxes in Texas, but companies pay a tax on gross receipts.
$9.3 billion: Amount of venture capital invested in New York startups since 2010. Texas startups have received $5.3 billion in the same time. Texas VC funds dwarf New York in sectors like industry and energy, semiconductors and biotech. New York’s big dollars went to media and entertainment, and software.
$19.1 billion: Value of tax breaks given to Texas corporations annually. Of the total, 78% goes toward sales-tax refunds and exemptions. New York businesses take in $1.82 billion in corporate income-tax credits, 44.8% of the total $4.06 billion business-incentive program.
Big oil, bigger banks
52: Number of Fortune 500 headquartered in both New York and Texas. The highest-ranked Texas companies are Exxon-Mobil and Phillips 66. New York’s are Verizon, JPMorgan Chase, IBM and Citigroup. New York’s companies on the list employ nearly 3 million people. Texas’ have 1.6 million workers. New York’s companies have 467% the assets of Texas’ and were 40% more profitable in 2013.
The portion of New Yorkers with graduate or professional degrees increased 19.5% from 2000 to 2012, to 14.1%. Texas saw an increase of 14.5%, to 8.7%. The average GDP in New York is $62,000, compared with $54,000 in Texas.
Texas has seen a 10.5% growth in employment since 2009, to 12.2 million jobs. In the same time, New York has seen a 0.2% decrease in jobs, to 8.97 million.
Sources: 2012 U.S. Census, 2012 American Community Survey, Gallup, Tax Foundation, PricewaterhouseCooper’s MoneyTree report, The New York Times’ United States of Subsidies database, Fortune 500, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis