One of Albany’s senior State Capitol correspondents vacations in Flat Rock, North Carolina, and returns to report the place has “no overwhelming problems,” despite local taxes far below the New York level.

The roads are paved. The grass is cut. Schools are open. Police are patrolling the streets. Water is delivered and sewage is disposed of.

Remarkable, isn’t it?

Not so remarkable if you consider the following quick-mined data from the Census Bureau:

ny-nc3-1278081

That “Welfare, Hospitals and Health” category consists mainly of Medicaid, a program on which New York spends nearly twice the national per-recipient average.  Even assuming that more than half the $1,282 per-capita difference between the two states is funded by the federal government, the gap between New York and North Carolina in this category is enormous.  (New York’s population is a little over double that of North Carolina, by the way.)

The difference in FTE (full-time equivalent) state and local government employment between New York and North Carolina may appear less significant on the surface.  However, consider this: if New York had the same population-adjusted government employment as North Carolina, it would have nearly 87,000 fewer workers, at an annualized salary savings of about $4.8 billion based on March 2007 payrolls.  If New York had the same population-adjusted government employment and if those workers received the same average pay as North Carolina workers, the Empire State’s annualized salary savings would total $22 billion.

Of course, the cost of living and of providing public services in New York, especially New York City, is considerably higher than in North Carolina.  But … $22 billion higher? This is just salaries, not counting fringe benefits.

The newly enacted 2009-10 state budget will add $6.1 billion to New York’s tax and fee burden — and last week’s MTA bailout deal will pile $2 billion on top of that.  Meanwhile, Gannett’s Jay Gallagher notes:

Back in the Tar Heel State (an obscure nickname apparently related to the timber industry), the state government has been making different kinds of decisions.

While we were in North Carolina, Gov. Beverly Perdue announced she was cutting the pay of all state workers, as well as all teachers, by a half a percent to help close a budget gap.

“I will do what I must in order to ensure that North Carolina can pay our bills and provide the essential services required by our citizens,” she said.

And yes, I checked the map. North Carolina is on the same planet as New York.

Yes, but is New York in the same universe as states like North Carolina and, for that matter, Virginia?

By the way, Gallagher’s 2005 book, The Politics of Decline, remains an excellent summary of how the Empire State got in this fix.

(UPDATE: The original posting here included the wrong version of the comparative table of Census data for the two states.)

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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