DON'T WAIT.

We publish the objective news, period. If you want the facts, then sign up below and join our movement for objective news:

TOP STORIES

Latest News

Concerns grow that New York businesses may leave state after Trump civil fraud verdict

By Mandy Donalds
|
February 20, 2024

Fears are mounting that New York-based businesses may consider relocating due to the recent civil fraud verdict against former President Donald Trump.

A recent court decision in New York against Trump has stirred significant concern among the business community. New York Supreme Court Justice Arthur Engoron ordered Trump to pay $364 million in penalties, a move that has top financial executives worried about the future of doing business in the state, as Newsmax reported.

Concerns grow among New York's business leaders

The New York State Attorney General’s Office has long been seen as an impediment to business, a sentiment that began during the tenure of former A.G. Elliot Spitzer, whose aggressive pursuit of financial firms, which resulted in billions in settlements, focused on what many considered minor offenses.

The use of state laws for political gain is not new, with the Martin Act being a notable tool available for use. This act has been employed to advance political careers rather than protect public interest, as argued by some business leaders.

"It’s embarrassing what you have to put up with to do business here," said one top executive, expressing a sentiment common among New York's business community. The frustration stems from what many see as an overly aggressive and politically motivated approach by state officials towards businesses.

Trump and Cuomo cases raise eyebrows

The legal strategies employed by current New York Attorney General Letitia James, especially in the cases of Donald Trump and former Gov. Andrew Cuomo, have drawn particular attention. James's approach is seen as an escalation of Spitzer's tactics, raising concerns among Wall Street executives about the state's legal and business environment.

Trump's case involved the valuation of real estate properties on loan applications, a matter that typically would not be considered a severe offense. The judgment against him has been particularly shocking to the financial sector, given that the bank involved conducted its own due diligence before making loans which were ultimately fully repaid.

James's campaign promises to prosecute Trump have also drawn criticism. Business leaders, many of whom do not support Trump, believe that her explicitly declared intent to target him should have disqualified her from handling the case.

Migration of businesses out of New York

The recent judgment is only the latest factor contributing to a broader trend of businesses leaving New York. High taxes, rampant crime, and soaring housing costs have already pushed companies to relocate.

Major firms like Goldman Sachs and Blackstone are moving to states like Texas and Florida, attracted by lower costs of living and a more business-friendly environment. Bloomberg reports that $2 trillion in assets have moved from New York and California to Sun Belt states, where costs can be up to 40% lower.

The exodus is not limited to the financial sector. North Carolina and Tennessee have also seen significant inflows of assets, driven by major firms seeking a more favorable business climate. This trend is eroding New York's tax base and impacting job prospects in the financial industry.

The impact on New York's financial job market

Once the heart of the U.S. financial industry, New York's share of financial jobs has significantly declined. From holding 33% of all U.S. financial industry jobs in 1990, New York's portion has shrunk to just 17.6%.

This decline reflects not only the migration of businesses but also a changing perception of New York as a place to do business. The state's political and legal environment is increasingly seen as hostile to business interests, a perception that has been exacerbated by high-profile legal cases and state policies.

The loss of businesses and jobs is having a tangible impact on New York's economy. The state is facing a shrinking tax revenue base, which could have long-term implications for public services and infrastructure.

Looking ahead: New York's business climate

The concerns raised by New York's business community highlight a growing tension between state policies and the needs of the business sector. The departure of major firms signals a critical moment for the state, which may need to reassess its approach to business regulation and legal action.

The implications of this trend extend beyond the financial sector, affecting the broader economic landscape of New York. As businesses continue to relocate, the state may need to consider reforms to retain its status as a global financial hub.

The situation presents a challenge for state officials, who must balance regulatory and legal responsibilities with the need to maintain a competitive business environment. The outcome of this balancing act will be crucial for New York's economic future.

Conclusion

  • New York businesses are considering relocation due to a recent $364 million verdict against Donald Trump and a perceived hostile business environment.
  • The use of state laws for political gain and aggressive legal strategies against high-profile figures like Trump and Cuomo has alarmed the business community.
  • High taxes, crime rates, and living costs, combined with a challenging political and legal landscape, are driving firms to states like Texas and Florida.
  • This migration is impacting New York's tax revenue and job market, particularly in the financial sector, where the state has seen a significant decline in its share of jobs.
  • The situation calls for a reassessment of New York's approach to business and legal practices to retain its position as a leading financial center.