New York’s budget basics

According to the National Association of State Budget Officers (NASBO), New York’s total expenditures in fiscal year (FY) 2021 were $186.6 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, New York’s combined state and local direct general expenditures were $304.9 billion in FY 2019 (the most recent year census data were available), or $15,667 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

New York’s largest spending areas per capita were public welfare ($4,067) and elementary and secondary education ($3,845). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

New York’s combined state and local general revenues were $327.9 billion in FY 2019, or $16,848 per capita. National per capita general revenues were $10,563. New York uses all major state and local taxes. After federal transfers, New York’s largest sources of per capita revenue were individual income taxes ($3,509) and property taxes ($3,178).

New York’s politics

Governor Kathy Hochul, a Democrat, assumed the office in August 2021, following the resignation of former Governor Andrew Cuomo. Former Governor Andrew Cuomo was elected in 2018 with 60 percent of the vote. The next gubernatorial election is in 2022.

Democrats control both the Assembly (105 Democrats to 43 Republicans and 1 independent) and Senate (43 Democrats to 20 Republicans), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in New York. The entire legislature is up for election in 2022 because both members and senators serve two-year terms.

New York’s budget institutions, rules, and constraints

New York uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. There are no further tax and expenditure limits in New York. There are limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

New York’s current budget

Governor Kathy Hochul released her FY 2023 budget proposal and gave her state of the state address in January 2022. The FY 2023 budget was enacted in April 2022.

New York enacted its FY 2022 budget in April 2021. The enacted budget included $208.9 billion in total spending and $112.2 billion in state operating spending. (New York’s general fund includes spending that NASBO categorizes as “other state funds,” so the historical totals reported below are lower. See NASBO’s report for more detail.)

Under the American Rescue Plan, New York will receive $12.7 billion in direct state fiscal aid and $9.9 billion in local government aid from the federal government. As of January 2022, New York had spent part of its ARP funds on revenue replacement.

According to NASBO, New York’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2021: $74.1 billion/$186.6 billion

• FY 2020: $77.5 billion/$173.0 billion

• FY 2019: $72.8 billion/$170.9 billion

For more on New York’s budget, see

• the New York Division of the Budget,
  
• the New York Department of Taxation and Finance,
  
• the New York State Comptroller, and
  
• the New York State Assembly: State Budget.

New York’s economic trends

New York’s per capita income (per the Bureau of Economic Analysis) was $76,415 in 2021, ranking third among the states. It was above both the national average of $63,444 and the Mideast regional average of $71,946. The state’s median household income (five-year estimate) was $71,117 in 2020, ranking 14th among the states and above the national average of $64,994. New York’s poverty rate was 13.6 percent in 2020 (five-year estimate), above the national rate of 12.8 percent.

Although New York’s averages tell a story about the entire state, New York is composed of diverse localities. For example, the city of Jamestown’s median household income was $34,767, and its poverty rate was 28.5 percent; the city of Garden City’s median household income was $186,607, and its poverty rate was 2.9 percent.

New York’s unemployment rate historically tracks the national average. (See how COVID-19 is affecting state employment and earnings data.)

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In New York, the average unemployment rate in 2021 was 6 percent for white residents, 10.1 percent for Black residents, and 9.5 percent for Hispanic or Latino residents. (This is preliminary data. See the 2020 data for a more detailed breakdown of state unemployment rates by race and ethnicity.)

The major industries that contributed the most to New York’s gross domestic product (GDP) in 2020 were finance, professional services, government, social services (i.e. health and education), and information. Finance and information contributed more to New York’s GDP than they did to the nation’s and region’s GDP, while professional services and government were less important to New York than they were to the nation and region in 2020.

Looking at more specific industries, among those that accounted for at least one percent of New York’s GDP in 2019, monetary authorities (e.g., banks) produced far more for the state than for the nation, contributing 9.8 percent to New York’s GDP and 3.3 percent to the nation’s. Other industries that overperformed in New York relative to national averages in 2019 were securities and commodity contracts, broadcasting and telecommunications, legal services, and education.

New York’s demographics

As of July 2020, New York’s population was 19,336,776. That was down 0.3 percent from 2010. For comparison, the nation’s population experienced 6.5 percent growth over the same period. The Urban Institute estimates the state’s population will increase 5.2 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.