Study: State fiscal load uneven
Downstate paying more in taxes, getting less in return
CAPITOL When it comes to tax revenues and public spending, upstate New York gets more than it gives.
And downstate gives more than it gets.
These findings are contained in a new report from the Rockefeller Institute of Government in Albany, which analyzed the regional distribution of dollars collected and spent within the New York state budget. Titled “Giving and Getting,” the report looked at receipts and expenditures from the 2009-10 fiscal year.
According to the report, New York City and the downstate suburbs contribute far more to the state budget in taxes and other revenues than they receive in state-funded expenditures. Robert Ward, deputy director of the Rockefeller Institute, said this information would likely come as a surprise to many upstate residents.
“A lot of people do know, but a lot of people do not,” Ward said about upstate giving less to state coffers than downstate. “A lot of taxpayers upstate very much believe they subsidize welfare in New York City.”
“Giving and Getting” examined four regions: New York City, the suburban downstate counties of Nassau, Suffolk, Westchester, Rockland and Putnam, the Capital Region and the state’s remaining 48 counties.
According to the report:
• New York City paid about 45 percent of state taxes and other revenues, but received 40 percent of state funding.
• The suburban downstate counties paid about 23 percent of state taxes and other revenues, but received 18 percent of state funding.
• The Capital Region paid less than 4 percent of state taxes and other revenues, but received 7 percent of state funding.
• The other 48 upstate counties paid about 24 percent of the state taxes and other revenues, but received 35 percent of state funding.
The report looked at about $80 billion in total expenditures.
“The scale of the transfer from downstate to upstate is pretty striking,” Ward said, commenting that the debate over the geographic distribution of wealth and services has been going on “literally for centuries.”
The analysis found that state revenues and expenditures have a clear relationship to distribution of personal income and poverty.
For instance, the share of local assistance spending, which includes state funding for Medicaid, education and social programs, in New York City was higher than the city’s 42.9 percent share of state population because the city has a higher share of state residents living in poverty. But the city’s share of income tax payments is also relatively high because its share of the state’s personal income is relatively high.
“That New York City and its suburbs pay disproportionately large shares of the state income tax relative to their populations is not surprising given the concentration of income in the Downstate Region,” the report explains.
The report also notes that this disparity is even higher than one might expect: New York City and its suburbs generated about 72 percent of the state’s income in 2008, but nearly 80 percent of the state’s personal income tax. This is the opposite of how things work upstate, where the region’s share of the state’s overall income tax is lower than its share of personal income.
“This disparity reflects the progressive nature of New York State’s personal income tax, in which effective tax rates on upper-income earners are significantly higher than those on middle and lower-income earners,” the report says.
Because the study excluded federal funding, less than half of the state’s total Medicaid expenditures for 2009-10 were included in the analysis.