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New York is no longer a ‘donor state’ – at least for now
By
Jon Campbell
Published Mar 9, 2022
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Jake Dobkin
By
Jon Campbell
Published Mar 9, 2022
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For years, New York was one of just a handful of states whose residents and businesses paid more in federal taxes than they got back in federal funding.
That’s no longer the case – at least for now. And that can be chalked up to yet another thing the COVID pandemic has turned on its head.
State Comptroller Tom DiNapoli issued his annual report Wednesday detailing how much federal tax revenue originates in New York and comparing it to how much federal funding the state and its residents get back. It’s a tradition DiNapoli inherited from the late Daniel Patrick Moynihan, who in 1977 issued a similar report back when he represented New York in the U.S. Senate.
For the 2020 federal fiscal year, all 50 states came out ahead. That included New York, which got a return of $1.59 for every tax dollar sent to Washington, a dramatic increase from the 91 cents it received in 2019, according to the report.
It’s easy to understand why.
Every state – and particularly hard-hit New York – received large sums of COVID-era relief at the height of the pandemic, buoyed by programs like the Payroll Protection Program for businesses and nonprofits. States also received a boost in unemployment benefits for out-of-work Americans. The extra federal funds contributed to a projected $5 billion surplus in New York’s budget this year.
“So much of this is driven by the billions of dollars that have come to New York as part of the COVID pandemic response,” DiNapoli said Wednesday of the trend.
The 2020 federal fiscal year ran from Oct. 1, 2019, through Sept. 30, 2020, accounting for the five months leading up to New York’s first COVID case and the seven months that followed.
It was a period that saw Congress and then-President Donald J. Trump pass the CARES Act, a $2.2 trillion package that authorized $1,200 direct stimulus payments to most Americans.
Over the course of the year, New York generated about $250 billion in federal taxes, according to DiNapoli’s report. In turn, the state and its residents benefited from $396 billion in federal aid – a 64% jump from $241 billion in the 2019 fiscal year.
DiNapoli was quick to put the numbers into perspective, however.
While New York netted $7,236 per resident on a per-capita basis, 39 states fared better. New Mexico ranked best at $16,999; New Jersey ranked last at $4,454.
And the comptroller also warned that the dramatic change is likely only temporary. While various COVID relief programs have continued into 2021 and 2022 – helping bolster the state government’s financial footing – they will ultimately run out and return New York to its status as a “donor state.”
“We tried to make it clear that it is something that we're benefiting from right now,” said DiNapoli, a Democrat. “My view was that it'll probably return to the more traditional relationship, which is that New York becomes a net giver rather than benefiting from it.”
Tagged
new york
comptroller
federal aid
pandemic recovery
Jon Campbell
Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at [email protected] or Signal at JonCampbellNY.90.
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