This month the Business Council issued a release saying that the state's business tax climate is the second worst in the nation. New York ranked near the bottom in four of the five tax categories studied by the Tax Foundation. The study compared corporate, individual, sales, unemployment and property taxes in each state.

"The data shows that New York does not have the option of taxing its way out of the current fiscal crisis," said Kenneth Adams, president and CEO of the Business Council of New York State. "Making New York's business tax climate worse would only beat down an already struggling economy. Instead, we need to reduce the tax burden, especially taxes on business property, capital and investment, to encourage growth and job creation.

In addition, New York State spent more money per capita than most other states, coming in fourth in a study completed by the Business Council in 2005. Its budget was 43 percent above the national average. The report detailed the revenue and spending of all 50 states. New York State's per-capita spending was $7,082 that year, well above the $4,961 national average. Only Vermont at $7,127, Wyoming at $7,861 and Alaska at $12,146 were higher.

What some of the numbers do not take into account, however, are the costs to live and govern in New York, and the benefits New Yorkers enjoy for their tax dollar. In the Empire State, the median household income is higher than the national average and New York also has 401.9 people per square mile compared to the national average of 79.6 per square mile, raising the cost of providing vital services significantly in New York.

"The modern market is characterized by mobile capital and labor. Therefore, companies will locate where they have the greatest competitive advantage," said Tax Foundation Staff Economist Josh Barro, the study's author. "States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth."

The Tax Foundation is based in Washington and was established in 1937 as a nonpartisan organization that focuses on sound tax policy.

The report also showed that New York spent more on welfare, including some Medicaid spending, than any other state in the country. The $2,209 per-capita spending in New York was 78 percent above the national average of $1,244.

In addition, New York's debt of $5,280 per state resident, was the fifth highest in the country, and 96 percent above the national average of $2,693. Its per capita education spending was 8 percent above the national average at $1,657, 18th in the nation, according to the report.