Part of this historically higher rate of taxation is due to the fact that New York has many more local governments and agencies than most states. In fact, New York has more than 10 percent of its working population occupying local government positions, compared to the national average of 7 percent. Employment-wise, local governments across the country utilize 30 percent less people to run them than in New York. The cause seems fairly clear – there are a significant amount of governmental and taxing entities. While placing governance at the local level is good for many reasons – it allows more direct control by denizens, creates a stronger sense of community and creates a government more quickly responsive to public needs, to name a few – it can also weaken governments’ abilities to reach economies of scale necessary to achieve cost savings on services. This means higher taxes to cover those higher costs. Since most individual municipalities in New York are too small to support large-scale service systems, savings enjoyed by larger governments are not available to them.
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