High Taxes, Regulations, Political Mismanagement Turning Binghamton, New York into Detroit

Detroit Bankruptcy

Oppressive, big government polices built on high taxes and stifling regulations that favor big cities to the detriment of small, rural towns is forcing much of small town New York into Detroit levels of financial collapse, a new report says.

The report by Desert News focused on Binghamton, a small town in upstate New York, as a prime example. The rural city is already in a financial condition nearly as bad as bankrupt Detroit and in some categories worse off. And Binghamton isn’t alone.

The “50,000-square mile region north of New York City,” William Tucker writes, “seems to be in an economic death spiral.”

That “death spiral” is being fueled by New York’s big cities, urban areas whose citizens are prone to pushing nanny state policies.

“Basically what you’ve got in New York is a state tax code and regulatory regimen written for New York City,” vice president for state projects at the Tax Foundation Joseph Henchman told Desert News. “Legislators say, ‘Look, New York is a center of world commerce. Businesses have to be here. It doesn’t matter how high we tax them.’ I hear that a lot. But when you apply that same logic to upstate, the impact is devastating.”

This clash of policy that favors only big cities is driving businesses to leave these liberal states in droves. This is reflected, at least for New York, in the fact that the Tax Foundation recently rated New York “dead last among the 50 states for business climate in 2013.”

But New York isn’t alone with these major problems. California and Illinois both rank at the bottom in nearly every category that marks a successful state. It isn’t anything new, either. Illinois has been ranking at the bottom in such categories as lawsuit climate, loss of population, and even has one of the highest single family home foreclosure rates in the nation. California isn’t much better.

And this isn’t even to mention the pension bombs that are on a slow fuse to exploding forcing many cities and states into bankruptcy, figuratively in some cases and literally in others.

But some over-spent cities are hoping to address their problems through federal bankruptcy laws. Detroit already took advantage of its state’s bankruptcy laws and is on the road to recovery and other states are looking at that protection as a last ditch effort to stave off disaster. In Illinois, for instance, one state lawmaker hopes to give cities the option to declare bankruptcy just like Detroit did.

But all too often the state legislatures in these states are nowhere near addressing the problems they are causing. In fact, these states often completely controlled by a profligate Democrat Party beholden to welfare policies and entrenched union interest are well on the road to making matters worse.

Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com