First Negative Balance Since 2019
By Hank Russell
With the historic, multi-year pandemic aid from the federal government mostly in the past, New York returned to a negative balance of payments with Washington, D.C. for the first time since Federal Fiscal Year (FFY) 2019, according to a report by State Comptroller Thomas P. DiNapoli.
In FFY 2024, the state generated $353.5 billion in federal taxes and received $341.1 billion in federal spending. That resulted in a negative balance of $12.4 billion. For every $1 in federal tax paid to Washington, the state received 97 cents in return, compared with a national level of $1.21.
New York has historically been a state that pays more in federal taxes than it receives in federal spending, according to the comptroller’s office. This pattern was temporarily altered by substantial increases in federal spending spurred by the COVID-19 pandemic. All states had a positive balance of payments in FFYs 2020 and 2021, and New York continued to have one through FFY 2023.
In FFY 2024, New York was only one of ten states with a negative balance of payments, based on the report. Only New Jersey, Massachusetts, Washington, California and Minnesota had higher negative payment balances.
Key findings in DiNapoli’s report include:
- New York generated $17,674 per capita for the U.S.Treasury, ranking it third among states in FFY 2024 and more than the national amount of $14,008. The state received $17,056 per capita, ranking it 25th in per-capita federal spending — higher than what the nation received ($16,999).
- Federal income taxes made up the largest portion of taxes New Yorkers paid, $9,527 per capita — 34.7% higher than the national average of $7,075.
- New York ranked second in per-capita for corporate income taxes, at $2,098, which was 35.4% higher than the national per capita amount of $1,549.
- New Mexico continued to rank first in per capita balance of payments (+$18,111), followed by Virginia, Alaska, Hawaii and West Virginia. New York ranked 45th and New Jersey ranked lowest (50th).
But there was some good news in the report, which showed that New York was at the top in some social services funding programs.
The Empire State was tops in receiving per-capita funding for basic health programs, public housing and rental assistance and Temporary Assistance for Needy Families (TANF). According to the report, the state got $630 per capita for basic health programs — far more than what the U.S. received ($50). The state took in $331 per capita for rental assistance and public housing, which is nearly three times as much as the U.S.’ $123 per-capita rate. Finally, New York got $132 per capita for Temporary Assistance for Needy Families (TANF), which is two-and-a-half times the U.S. per-capita rate of $52. (All monies were distributed through federal grants.)
Additionally, in FFY 2024, New York received $60.8 billion in Medicaid funding, or $3,040 per capita, the report stated. That is 68.5% higher than the national average of $1,804, ranking it third in the U.S. This money also came from grants.
Conversely, the state was dead-last or next to last in three areas. According the comptroller’s office, New York only got $215 per capita for federal employment benefits, while the U.S. per-capita rate was $526. For veterans benefits, New York was 49th, with $455, compared to the national rate of $914 per capita.
Lastly, New York was next to last when it came to receiving federal highway grants. Based on the report’s data, the state got $113 per capita — 27.6% less than what U.S. took in per capita ($156). The report said this poor distribution of highways grants to the state was driven by factors, including population density, transportation patterns, and the distribution formulas for federal highway funds,
“The state is once again sending more money to Washington than it gets back,” DiNapoli said. “With the impact of the federal pandemic aid largely gone, New York returns to the familiar position of being in the red. With damaging policies being implemented by the federal government, New York could have a disproportionate reduction in federal funding, which will only worsen the state’s balance of payments in future years.”