By Forum Staff
Federal pandemic relief funds resulted in New York having a positive balance of payments with Washington, with the state ranking 42nd in federal Fiscal Year 2023 on a per capita basis, according to a report issued on Monday by State Comptroller Tom DiNapoli.
This is the fourth year in a row that New York has had a positive balance of payments, after a long history of sending more tax dollars to Washington than it receives back. For every tax dollar paid to Washington in FY 2023, the State received $1.06 in return; the national average was $1.32.
Prior to the pandemic, New York consistently ranked among the states with the largest negative balance of payments.
DiNapoli warned that actions currently being taken and under consideration by the new administration in Washington may significantly change the relationship between the federal government and states. Unprecedented cuts have been announced to education, health, and environmental programs, and additional actions may reduce grants to state and local governments, limit aid to individuals, and decrease federal spending on payrolls. Most states would lose from such actions, although which will be most impacted remains to be seen.
“Major cuts in federal funding simply cannot be replaced by state taxpayers, will reduce the services the state provides and will exacerbate the long-standing history of New Yorkers sending more of their hard-earned tax dollars to the federal government than they get back,” DiNapoli said.
Key findings in the report:
- In FY 2023, federal expenditures for each U.S. resident were on average $4,089 more than they paid in federal taxes; for New York residents, it was $912 per capita.
- New York generated $16,355 per capita, ranking it 3rd in per capita contribution to the federal treasury, and received $17,266 per capita, ranking it 21st in per capita federal spending.
- Federal expenditure areas where New York ranks high include Medicaid ($3,082 per capita, 2nd), Supplemental Nutrition Assistance Program or SNAP ($533 per capita, 4th), rental assistance and public housing ($295 per capita, 1st), and Supplemental Security Income ($238 per capita, 6th).
- Federal expenditure areas where New York ranks low include federal employee wages and salaries ($459 per capita, 42nd), veterans benefits ($445 per capita, 49th), federal employees retirement ($216 per capita, 50th), and highways ($103 per capita, 49th).
New York generated approximately $320.1 billion in tax collections, 7.5 percent of all U.S. tax collections in FY 2023, while the state represented 5.8 percent of the nation’s population. At $16,355, New York’s per capita contribution to the federal treasury was 27.8 percent more than the national level, and New York’s per capita tax contribution ranks highly in most tax categories.
Individual income taxes represent the largest portion of taxes paid; New York’s were $8,745 per capita – 35.9 percent higher than the national average of $6,433. The second largest component of federal revenues reflects payments for social insurance taxes and contributions, including sources that finance programs for Social Security and Medicare, among others. New York’s per capita contribution for such payments, $5,472, was 14.2 percent above the national level of $4,792, ranking it 7th. The state ranked first on per capita corporate income taxes with $1,840, 47 percent higher than the national per capita level of $1,252.
