Thursday, December 13, 2001
NEW YORK STATE'S 'BALANCE OF PAYMENTS' WITH WASHINGTON REACHES DEFICIT OF $47 BILLION, STUDY FINDS
ALBANY New York State taxpayers sent the federal government some $47 billion more in taxes than the state received in federal spending in fiscal year 2000, according to a new analysis by The Public Policy Institute.
The deficit in the state's "balance of payments" with Washington is the largest ever, and up from $37.4 billion in 1999, the Institute found. The Institute is the research affiliate of The Business Council of New York State Inc.
"The size of our imbalance of payments represents a larger-than-ever economic drain on the Empire State," Daniel B. Walsh, president/CEO of The Business Council and CEO of the Institute, wrote in a letter to members of New York's Congressional delegation. Walsh told the delegation that the new research "demonstrates the rightness of the cause for which Governor Pataki and you have been fighting in recent weeks - a fair assistance package to help with rebuilding in the wake of the terrorist attacks."
In fiscal 2000, the Internal Revenue Service collected more than $166 billion in taxes on economic activity in New York State. Federal agencies returned an estimated $119 billion in grants, procurement and other expenditures.
The Public Policy Institute analysis is based on the research performed in past years for former Senator Daniel Patrick Moynihan by experts at Harvard University's Kennedy School of Government. It uses the same base data as the Kennedy School analyses - tax data from the Tax Foundation, a non-partisan research group based in Washington, and expenditure data from the U.S. Census Bureau. The Public Policy Institute's analysis differs slightly from the Kennedy School's methodology; for instance, the Institute's calculations use actual tax and spending data rather than adjusting those numbers to reflect cost-of-living differences among the states.
|Table 1: New York State's Balance of Payments with Washington
FY 2000 (dollars in millions)
|Total federal taxes paid by New Yorkers1||$158,508|
|Federal taxes paid by New Jersey and Connecticut residents who work in New York2|| 8,175
|A: Federal taxes on New York||$166,693|
|Nominal federal expenditure in New York3||$110,333|
|Allocated share of interest on federal debt4||9,012|
|B: Federal expenditures in New York|| $119,345
|New York's balance of payments (B - A)||-$47,338|
|Largest Losers in Federal Balance of Payments|
|Table 2: States' Balance of Payments with Washington
(Dollars in millions)
|State||Taxes Paid||Spending Received||Surplus/Deficit|
|The Public Policy Institute|