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Gary Hughes
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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, www.census.gov. 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