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For Release — Thursday, July 26, 2001

UPDATE ON NEW YORK'S 'TAX GAP' WITH OTHER STATES: CENSUS BUREAU RELEASES DATA ON STATE-LEVEL TAXES FOR FISCAL 2000; OVERALL STATE-AND-LOCAL TAX GAP DECLINES;
COUNCIL SAYS NEW DATA ARGUE FOR SPENDING RESTRAINT, MORE TAX CUTS

The U.S. Census Bureau released data today showing that the extra burden of state-level taxes in New York was 14.5 percent in fiscal 2000, an improvement from the previous year but slightly higher than the 1998 "tax gap."

As of 1999-2000, New Yorkers paid an average of $2,199 per capita in state taxes. (See table, below.) The average for all 50 states was $1,921. By another measure, state taxes as a proportion of personal income, state taxes in New York are slightly below the national average. That figure for New York was $67.68 per $1,000 of personal income, compared to $69.52 nationally.

The Census data released today also showed that state-level personal income and corporate income taxes in New York remain far higher than those in most states. State personal income taxes in the Empire State averaged $1,222 per person, nearly 77 percent above average. Corporate income taxes were 27 percent above average. General sales and gross receipts tax collections in New York were relatively low, and the state ranked 39th among all the states in that measure. Sales and gross receipts taxes on utilities, though, were more than double the national average.

Earlier in July, the Census Bureau released combined state-and-local government figures for fiscal 1998, showing that the "tax gap" between New York and other states — the extra cost of state and local taxes in the Empire State compared to the average nationwide — was continuing decline and was at its lowest level in years.

For fiscal year 1998, combined state and local taxes in New York totaled $4,318 per person. That was 50.8 percent above the average for all states, and second-highest in the nation behind Connecticut. (See second table, below.) The last time New York's tax gap was nearly so low was in 1981. By another measurement, taxes compared to personal income in each state, New York's combined state and local taxes were 26.8 percent above the national average in 1998. (See third table, below.)

The Census Bureau is the authoritative source of financial data on all 50 states. The Public Policy Institute, research affiliate of The Business Council, analyzed the Census data to compare taxes and spending in New York with those in other states.

"Governor Pataki and the Legislature have made great progress in cutting our tax gap and making New York more competitive," said Daniel B. Walsh, president of The Business Council and CEO of the Institute. "A lot of work still remains. It's important that this year's state budget continue to cut taxes and hold the line on spending, to make further tax cuts possible in the years ahead."

The per-capita tax gap in New York was down from 52.9 percent in 1997, and 60.5 percent in 1994, when state leaders began to cut taxes after several years of tax increases.

Local taxes remain the Empire State's major competitive problem, at more than twice the national average on a per-capita basis, the new Census data show. Local taxes in New York averaged $2,329 for every resident, by far the highest of any state. The taxes imposed by state government in New York were 13.4 percent above average on a per-capita basis.

The Institute's analysis of the state-and-local tax data also showed:

State-only Taxes Per Capita 2000
Rank State Amt.   Rank State Amt.
1 Connecticut $2,987   27 Arkansas $1,822
2 Hawaii 2,752   28 Kansas 1,810
3 Delaware 2,721   29 Virginia 1,787
4 Minnesota 2,711   30 Utah 1,782
5 Massachusetts 2,544   31 Iowa 1,772
6 California 2,474   32 Nebraska 1,742
7 Vermont 2,416   33 Oregon 1,738
8 Wisconsin 2,357   34 Ohio 1,733
9 Michigan 2,290   35 Oklahoma 1,696
10 Alaska 2,270   36 Indiana 1,662
11 NEW YORK $2,199   37 Mississippi 1,656
12 New Jersey 2,157   38 Georgia 1,650
13 Washington 2,132   39 Colorado 1,645
14 Maine 2,087   40 South Carolina 1,591
15 New Mexico 2,058   41 Arizona 1,579
16 Maryland 1,955   42 Montana 1,564
17 Wyoming 1,952   43 Florida 1,553
18 Rhode Island 1,941   44 Missouri 1,532
19 Kentucky 1,904   45 Louisiana 1,457
20 North Carolina 1,890   46 Alabama 1,448
21 Nevada 1,860   47 New Hampshire 1,372
22 West Virginia 1,849   48 Tennessee 1,360
23 Idaho 1,837   49 Texas 1,315
24 Illinois 1,835   50 South Dakota 1,228
25 Pennsylvania 1,829
US average
$1,921
26 North Dakota 1,826
N.Y.S. % above avg.
14.5%
Source: Public Policy Institute calculations from
US Census Bureau data

State and Local Taxes Per Capita 1998
Rank State Amt.   Rank State Amt.
1 Connecticut $4,425   27 Iowa $2,606
2 NEW YORK $4,318   28 North Carolina 2,557
3 New Jersey 3,698   29 Georgia 2,552
4 Massachusetts 3,531   30 North Dakota 2,549
5 Minnesota 3,490   31 Florida 2,545
6 Hawaii 3,293   32 Indiana 2,500
7 Alaska 3,279   33 Oregon 2,479
8 Maine 3,225   34 Utah 2,459
9 Delaware 3,218   35 Missouri 2,449
10 Wisconsin 3,186   36 New Hampshire 2,416
11 Maryland 3,126   37 Kentucky 2,377
12 Rhode Island 3,117   38 Arizona 2,371
13 Washington 3,038   39 Texas 2,344
14 California 3,022   40 Idaho 2,334
15 Illinois 2,959   41 Louisiana 2,303
16 Vermont 2,911   42 Montana 2,291
17 Wyoming 2,901   43 Oklahoma 2,240
18 Michigan 2,874   44 South Carolina 2,187
19 Kansas 2,805   45 West Virginia 2,183
20 Pennsylvania 2,802   46 South Dakota 2,158
21 Colorado 2,763   47 Arkansas 2,143
22 Nebraska 2,751   48 Tennessee 2,079
23 Ohio 2,750   49 Mississippi 2,057
24 Nevada 2,727   50 Alabama 1,916
25 Virginia 2,675 US average $2,863
26 New Mexico 2,637 N.Y.S. % Above avg. 50.8%
Source: Public Policy Institute calculations from
US Census Bureau data
State and Local Taxes Per $1,000 Personal Income 1998
Rank State Amt.   Rank State Amt.
1 Maine $144   27 Mississippi $110
2 NEW YORK $142   28 Ohio 110
3 New Mexico 131   29 Louisiana 109
4 Wisconsin 129   30 Maryland 108
5 Minnesota 128   31 Arizona 107
6 Hawaii 126   32 Arkansas 107
7 Connecticut 125   33 North Carolina 107
8 Vermont 125   34 Oklahoma 107
9 Alaska 122   35 Pennsylvania 107
10 North Dakota 122   36 Georgia 106
11 Wyoming 122   37 Indiana 106
12 Delaware 119   38 Illinois 105
13 Utah 118   39 South Carolina 103
14 Rhode Island 117   40 Missouri 102
15 Kansas 116   41 Colorado 101
16 California 115   42 Nevada 101
17 New Jersey 115   43 Oregon 101
18 Washington 115   44 Virginia 101
19 Idaho 114   45 Florida 100
20 Montana 114   46 Texas 99
21 Kentucky 113   47 South Dakota 98
22 Massachusetts 113   48 Alabama 91
23 Michigan 113   49 Tennessee 90
24 Nebraska 112   50 New Hampshire 88
25 West Virginia 112 US average $112
26 Iowa 110 N.Y.S. % Above avg. 26.8%
Source: Public Policy Institute calculations from
US Census Bureau data


The new Census data are available through the Governments section of the Census Bureau website. Following is a list of tables compiled by the Public Policy Institute showing other key tax-comparison data.

State and Local Taxes Per Capita 1998
State and Local Taxes Per $1,000 Personal Income 1998
State-only Taxes Per Capita 1998
Local Government Taxes Per Capita 1998
Property Taxes Per Capita 1998
Personal Income Taxes Per Capita 1998
Corporate Income Taxes Per Capita 1998
State and Local Government Spending Per Capita 1998
State and Local Education Spending Per Capita 1998
State and Local Social Services Spending Per Capita 1998
State and Local Government Debt Per Capita 1998
State Corporate Income Taxes Per Capita 2000
State-only Taxes Per Capita 2000
State Personal Income Taxes Per Capita 2000
State Sales/Gross Receipts Taxes On Utilities, Per Capita 200