New York

State Fiscal Briefs

September 2021

Looking for New York data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

New York’s budget basics

According to the National Association of State Budget Officers (NASBO), New York’s total expenditures in fiscal year (FY) 2020 were $173.0 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2020 were $2.3 trillion, ranging from $4.7 billion in Wyoming to $337.7 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 $297.2 billion in FY 2018 (the most recent year census data were available), or $15,217 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 $9,801.

New York’s largest spending areas per capita were public welfare ($3,911) and elementary and secondary education ($3,681). 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 $315.7 billion in FY 2018, or $16,163 per capita. National per capita general revenues were $10,071. 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 ($3,407) and property taxes ($3,025).

New York’s politics

Governor Andrew Cuomo, a Democrat, was elected in 2018 with 60 percent of the vote. The next gubernatorial election is in 2022.

Democrats control both the Assembly (106 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 recent fiscal debates

  • In 2016, New Yorkers claimed the largest average state and local tax (SALT) deduction ($21,779). As a result, the $10,000 cap on SALT deductions in the 2017 Tax Cuts and Jobs Act (TCJA) had a significant effect on the state’s taxpayers. Although the TCJA lowered most New Yorkers’ federal tax (as it did nationally), the federal tax cuts were generally smaller in New York than in states with lower or no state income tax because of the SALT cap. In response to the TCJA, Governor Cuomo said, “Washington has launched an all-out, direct attack on New York State’s economic future.” New York enacted legislation that allowed taxpayers to replace their state and local taxes with charitable gifts to the government (since the federal government does not cap charitable deductions), but the US Treasury Department blocked this workaround. New York, along with Connecticut, Maryland, and New Jersey, is fighting the TCJA in court.
  • New York limits local governments to property tax revenue growth of 2 percent or the rate of inflation (whichever is less). The restriction applies to all local governments in the state except for New York City. The cap was established in 2011 and made permanent in 2019. The cap has shifted much of the state’s K–12 education funding away from local property taxes and to the state’s individual income tax.
  • In 2019, New York City became the first city to enact congestion pricing, called “Central Business District Tolling.” The Metropolitan Transportation Authority will install electronic tolling devices around a section of Manhattan that will, when the program goes live in 2021, charge drivers who enter the zone a once-a-day fee. The tolls have not been set, but the revenue is dedicated to MTA capital projects.

New York’s current budget

Governor Cuomo released his FY 2021 budget proposal in January 2020. The proposed budget included $106 billion in state operating funds, a 2 percent increase from FY 2020.

New York enacted its FY 2021 budget in April 2020. (New York’s fiscal year always starts April 1; most states begin their fiscal year on July 1.) The enacted budget included $106 billion in state operating funds, but the legislation stipulated that if the federal government did not provide more aid to state and local governments ( Congress has recently passed the CARES Act) and/or if the economy did not sufficiently recover, the state budget director was authorized to reduce total spending by up to $10 billion. In the case of insufficient funds, the state budget director was authorized to develop a plan for across-the-board cuts and implement them as necessary over the course of the fiscal year. The enacted budget did not include any tax increases. According to the governor’s recent budget proposal, actual total spending for FY 2021 will be roughly $102 billion.

Governor Cuomo released his FY 2022 budget proposal and gave his State of the State address in January 2021. The governor’s proposed spending was $103 billion, slightly above the state’s enacted spending total from FY 2021 but below what the governor had proposed for the fiscal year before the COVID-19 pandemic. To balance the budget, Governor Cuomo proposes increasing income taxes for the state’s highest earners. His plan would create five new tax rates on taxable income greater than $5 million, with the final “surcharge” applying to taxable income greater than $100 million. In his address, the governor also supported legalizing and taxing cannabis. However, even with these tax increases, Governor Cuomo’s budget is still dependent on additional federal aid: his plans anticipate the federal government sending New York either $6 billion or $15 billion in new funding.

For more on New York’s budget, see