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(AND NOBODY’S SURPRISED) New York…city & the state…lead the nation with a taxing and spending one-two gut punch

February 17, 2024
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State and local tax collections were $135 per $1,000 of total personal income, the highest of all states and 36 percent higher than the national average, the report’s authors said.

By Christian Wade, Contributor | The Center Square

(The Center Square) – New York and its local governments top the charts nationally when it comes to higher taxes and spending, according to a new report.

Analyzing census state and local finance data, the Citizens Budget Commission found that in 2021 the state and its localities were the highest taxing and second-highest spending among all U.S. states.

New York led in taxes, collecting the most per person – 63% more than the national average – and the most per $1,000 personal income, or 36% more than the national average.

Collectively, the state and local governments collected more revenue from many types of taxes – property, personal income, corporate, and sales – than most other states and their localities, according to the report.

New York led the nation with $10,331 taxes collected per resident – nearly $4,000 more than the national average.

State and local tax collections were $135 per $1,000 of total personal income, the highest of all states and 36% higher than the national average, the report’s authors said.

The report’s authors noted that tax increases approved by the state and local governments since 2021 have likely driven tax burdens even higher.

“While the state’s economy is strong, further tax increases could be counter-productive, threatening New York’s competitiveness,” the group wrote.

“They also should not be needed, since the state and its localities should instead focus on the most impactful programs and policies, running them efficiently and effectively.’

The report comes at a “precarious time” for the state and New York City, each in the process of determining their fiscal year 2025 budgets.

Gov. Kathy Hochul has filed a preliminary $233 billion budget in January that includes $2.4 billion to help New York City manage its migrant crisis – a $500 million increase.

New York City Mayor Eric Adams has proposed a $109.4 billion preliminary budget that includes cuts to offset the impact of caring for tens of thousands of migrants. Neither spending plan includes any wholesale tax cuts.

“The decisions made will significantly affect New York’s trajectory – its ability to serve New Yorkers, accelerate its economic recovery, and attract and retain residents, businesses, and jobs,” the report’s authors wrote.

“Both the state and city face fiscal stress, as well as calls to increase funding for a variety of services.”

Higher than average taxes and spending is “not inherently bad” the report’s authors said, pointing out that New York “has long chosen to levy high taxes to fund an extensive array and level of services.”

“The issue is whether the value proposition – Are residents and businesses satisfied with what they get, what they pay for, and what they need? – continues to hold and bolster New York’s future,” they wrote.

“Public officials and the public should consider New York relative to its competitors to ensure that the tax burdens supporting government spending do not undercut the state’s job growth and attractiveness to residents and businesses,” they added.

“They also should consider whether New York’s local governments should be able to provide needed services at a lower cost.” ##