It’s difficult to know exactly what combination of factors drove General Electric to select Boston as its new home instead of New York, where state leaders were trying to lure it. But somewhere in that mix of influences, it is impossible to ignore this bottom line: New York’s taxes are high, and it lost.
However much this state has accomplished to make itself more business friendly, it couldn’t compete even with high-tax Massachusetts, let alone the other states that have a built-in advantage over New York. That demands some soul searching in Albany.
A number of issues were involved in the coming move, announced last week. GE had said three years ago that it was considering leaving its 30-year home in Fairfield, Conn. It had moved there from New York City in 1976 and New York had hopes of luring it back.
Those hopes were dashed last week just as Gov. Andrew M. Cuomo was delivering his State of the State address. That was when GE leaders announced their choice was not New York, but Boston. Chairman and CEO Jeff Immelt said that the corporation wanted “to be at the center of an ecosystem that shares our aspirations.”
He observed that “Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically fluent workforce focused on solving challenges for the world.”
It is possible, then, that Boston offered advantages that would have been difficult to overcome under any circumstances. Yet, the Connecticut tax structure was among the reasons GE sought to leave that state, and in that regard, New York still doesn’t compete well.
Indeed, the Tax Foundation, a conservative fiscal group, reported on Wednesday that New York has retained its self-defeating status as the state with the highest combined state and local tax burden. Second worst was Connecticut.
But Massachusetts is no low-tax haven. Perhaps the area just offered GE what it needed in a new headquarters, or maybe it also didn’t see the sense of jumping from the high-tax frying pan into the higher-tax fire. We have work to do.