DiNapoli: New York Sending More Tax Dollars to Federal Government Than it Gets Back
The Gap Grew Over Three-Year PeriodNew York State received 84 cents for every dollar it sent in taxes to the federal government in 2016, a wider gap than three years before, according to a report released by State Comptroller Thomas DiNapoli.
"New York sent an estimated $40.9 billion more in tax payments to Washington in 2016 than it received back in federal spending," DiNapoli said. "While the Empire State fares well in some areas, in total it receives significantly less per tax dollar than the vast majority of states. Federal decision makers should consider this imbalance as they debate proposed budget and policy changes that could significantly impact New York and other states."
This report, a follow-up to one DiNapoli released in 2015, shows federal spending in New York during federal fiscal year 2016 included $55 billion in Social Security payments, $47 billion for Medicare and more than $46 billion for Medicaid and other safety net grants. Billions of federal dollars also supported transportation, education and veterans benefits programs. Meanwhile, New Yorkers paid almost $255 billion in taxes to the federal government. While New York received 16 cents less per dollar contributed, most states received more than they paid. The average return for all states was $1.18 cents per tax dollar sent to Washington.
In federal fiscal year (FFY) 2013, New York generated $19.9 billion more in federal taxes than it received back in federal spending, according to DiNapoli's 2015 analysis. Since then, the gap between taxes paid and spending received in New York has doubled to $40.9 billion. It was the largest of any state's deficit with Washington based on total dollars. The increase was largely because federal income tax collections from the state rose. New Jersey had the next largest deficit at $27.5 billion. Florida had the largest surplus in total dollars, followed by Virginia.
New York's per capita contribution to the federal treasury in 2016 was $12,914, which was 36 percent more than the national average of $9,476. New York received $10,844 in per capita federal spending, slightly below the national average of $11,183. Only three states – New Jersey, North Dakota and Connecticut – experienced a more negative balance of payments than New York's per capita deficit of $2,070. New Mexico fared the best, with a per capita surplus of almost $9,700.
Individual income taxes made up over $1.5 trillion, or 50.3 percent, of all taxes paid to the federal government in FFY 2016. New York's payments of more than $145 billion represented 9.4 percent of total federal income taxes. New York's per capita individual income tax payments of $7,361 were 54 percent higher than the national average of $4,768. New York ranked third among the states in this category, with Connecticut first at $9,515.
In 2016, the federal government spent more than $3.8 trillion and brought in approximately $3.3 trillion, with a budget deficit of $585 billion. New York generated 8.3 percent of federal tax payments, while the state represented 6.1 percent of the nation's population in 2016.
By far the largest category of federal expenditures is direct payments to or on behalf of individuals, which totaled nearly $2.3 trillion, or 63 percent, of federal spending allocated to the states in FFY 2016. Social Security and Medicare represented more than 70 percent of these direct payments in FFY 2016. With $2,383 in per capita Medicare payments, New York received 11.4 percent more than the national average and ranked 12th among the states.
DiNapoli's report also shows:
- The federal government provided more than $655 billion in grants to state and local governments in FFY 2016. Medicaid represented 56 percent of this total. Spending on transportation was the second largest category, at 8.3 percent of the total. New York ranked fourth among the states in per capita federal grants at $3,103, or 53 percent, above the national average, largely because of Medicaid and other safety net grants.
- The federal government spent just over $445 billion in FFY 2016 to purchase services and goods in the 50 states and Washington, D.C. New York ranked 45th among the states in this category. California received the highest total procurement spending from the federal government at $53.3 billion.
- Spending on federal employee wages and salaries throughout the nation totaled $251.4 billion, for a per capita national average of $778 in FFY 2016, including civilian and military salaries. In New York, $7.4 billion was spent on federal employee wages and salaries, slightly less than 3 percent of the national total. Overall, per capita expenditures in New York for wages and salaries ($375) were almost 52 percent below the national level and ranked New York 42nd among all states.
Excel files providing detailed figures beyond those in the report can be downloaded by clicking http://www.osc.state.ny.us/reports/budget/2017/federal-budget-fiscal-year-2016.xlsx
For access to state and local government spending, public authority financial data and information on 140,000 state contracts, visit Open Book New York. The easy-to-use website was created to promote transparency in government and provide taxpayers with better access to financial data.