Wealthy in Westchester, Rockland, Putnam take flak but vital to HV economy
GalleriesThe Monarch at Ridge Hill in Yonkers
Westchester's in the money.
The county has the 13th-greatest concentration of high-income households in the nation -- about the same as Manhattan's. And not far behind are Rockland and Putnam's, according to Census Bureau data obtained by Newsday.
That concentration of wealth helps fuel the region's economic engine, experts say, but also will project the lower Hudson Valley into the center of the national debate over tax policy on the wealthiest Americans as cited in President Barack Obama's State of the Union address.
"It's a dangerous game" to try to turn the highest earners into "ATMs," said Laurence Gottlieb, incoming president of the Hudson Valley Economic Development Corp.
Westchester County residents already face state taxes that are among the highest in the country and local property taxes that are tops in the nation. Gottlieb argued that top earners could decide they've reached their limit and move elsewhere.
"What we don't want in this region is for people to say 'Enough is enough' and go to Florida," he said. "There's only so many punches someone can take before they pack up and leave."
The exit of top-earning households would leave a gaping hole in the local economy, Gottlieb said.
"Right, wrong or indifferent, wealth or personal wealth is being maligned," he said. "The reality is much of the household income and wealth has come through a tremendous amount of perspiration. The goods and services these people purchase personally or through a business keep a lot of other people employed. It's important to see them as an economic platform on which others have built their livelihood."
For instance, according to Christy Huebner Caridi, director of the Marist College Bureau of Economic Research, high-income households hire cooks, house cleaners and gardeners and use dry cleaners and tailors more than their lower-income counterparts.
In addition, many of the households get their income from jobs in New York City. From an economic perspective, Caridi said, that creates a beneficial net inflow of funds into Westchester County comparable to tourism money.
Gottlieb also contended that the top earners helped buoy the region's economy during the Great Recession.
"Since 2007, the reason Westchester and pockets around Westchester have survived better than other parts of the country is because of all that wealth," he said.
"Let's say a woman lost her job on Wall Street as an attorney or trader," he said. Unlike many other workers, he added, she's likely to get a substantial settlement as she leaves her job and can use that to start a new venture.
"She has the capability, even when banks aren't leading money, to dip into private capitalization to start that business," Gottlieb said. By contrast, in other parts of the country, "There's no friends and family bank."
In Westchester County, 17.5 percent of households earned at least $191,469 a year from 2007 to 2011, putting them in the top 5 percent nationwide, according to the Census Bureau figures. Rockland ranks 29th nationwide with 13.3 percent of households, and Putnam is 32nd with 13.1 percent.
In Orange County, 6.4 percent of residents fit into the top 5 percent, versus 7 percent for Dutchess County and 4.9 percent for Ulster County.
The top three pockets of U.S. wealth are in Virginia, led by Falls Church, where one household in four qualifies as among the top 5 percent.
"We can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and most powerful," Obama said in the speech.
To qualify as among the top 1 percent in 2009, according to Internal Revenue Service statistics, a household would require an annual income of $343,927. Though that group certainly would be represented in Westchester, Rockland and Putnam, their precise numbers are uncertain.
One retailer who serves Chappaqua, home of Bill and Hillary Clinton and one of the wealthiest enclaves in Westchester, said that even the wealthy can fall on hard times.
"There's good times and bad for everyone," said Kirk Sprenger, owner of Kasco Wine & Spirits. "Sometimes the wealthy get hit the hardest. An upper six-figure earner loses his job. How hard is it for him to replace that job?"
In the flush times, Sprenger said, customers would buy $200 bottles of wine, but when hard times hit, $75 bottles came into fashion.
And, Sprenger discovered, some buyers have discovered some good buys in the $15 bin, deciding, "We don't need to buy a $50 bottle of wine."
Though the economy gradually is bouncing back, customers remain hesitant to spend as freely as they once did.
"You get bitten, you're apt to be more careful," he said.