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
California -$63,319 Michigan
-$20,531
NEW YORK -$47,338 Connecticut -$15,910
Illinois -$40,205 Florida -$15,767
New Jersey -$27,267 Massachusetts -$14,245
Texas -$23,099 Ohio -$11,699
Calculations by The Public Policy Institute
1 Source: Tax Foundation, Washington, D.C.
2 New Jersey residents paid $81 billion, and Connecticut residents $39 billion, in federal taxes in 2000. Approximately 7% of federal taxes collected in New Jersey, and 6.4% of those from Connecticut, are attributable to jobs in New York State. (Percentages are based on New York State Department of Taxation and Finance figures for state taxes paid by New Jersey and Connecticut residents.)
3 Source: US Census Bureau, Consolidated Federal Funds Report for Fiscal Year 2000.
4 Total interest paid domestically on federal debt was $113 billion; the 8 percent proportion allocated to New York is the state's share of total federal tax payments.


Table 2: States' Balance of Payments with Washington
(Dollars in millions)
State
Taxes Paid
Spending Received
Surplus/Deficit
Alabama
23,502
30,553
7,051
Alaska
4,374
6,202
1,828
Arizona
30,749
30,992
243
Arkansas
13,256
15,582
2,326
California
253,481
190,162
-63,319
Colorado
33,212
24,806
-8,406
Connecticut
36,489
21,733
-14,756
Delaware
5,844
4,291
-1,553
Florida
115,086
99,319
-15,767
Georgia
53,105
45,479
-7,626
Hawaii
7,135
9,421
2,286
Idaho
6,678
7,389
711
Illinois
100,213
65,705
-34,508
Indiana
38,605
30,918
-7,687
Iowa
17,521
15,747
-1,774
Kansas
17,343
15,246
-2,097
Kentucky
21,456
25,664
4,208
Louisiana
23,014
27,263
4,249
Maine
7,336
8,266
930
Maryland
42,232
47,490
5,258
Massachusetts
58,389
44,144
-14,245
Michigan
71,414
50,883
-20,531
Minnesota
37,648
25,132
-12,516
Mississippi
12,728
19,082
6,354
Missouri
35,118
37,684
2,566
Montana
4,597
6,178
1,581
Nebraska
10,946
10,233
-713
Nevada
15,461
9,505
-5,956
New Hampshire
10,114
6,377
-3,737
New Jersey
75,341
48,075
-27,266
New Mexico
8,795
14,970
6,175
NEW YORK
166,683
119,345
-47,338
North Carolina
48,436
44,121
-4,315
North Dakota
3,495
5,444
1,949
Ohio
73,217
61,518
-11,699
Oklahoma
17,436
21,604
4,168
Oregon
22,108
17,810
-4,298
Pennsylvania
85,630
78,183
-7,447
Rhode Island
7,191
7,285
94
South Carolina
21,659
23,525
1,866
South Dakota
4,338
5,385
1,047
Tennessee
34,441
35,518
1,077
Texas
137,404
114,305
-23,099
Utah
11,662
10,700
-962
Vermont
3,855
3,581
-274
Virginia
52,243
65,679
13,436
Washington
48,066
36,630
-11,436
West Virginia
8,300
12,211
3,911
Wisconsin
36,122
26,354
-9,768
Wyoming
3,645
3,427
-218
The Public Policy Institute
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