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• New Yorkers have historically had a negative balance of payments, paying out more in federal taxes than the state received in federal expenditures.
• The coronavirus pandemic changed this track record, because of an unusual degree of federal spending. As a result, New York had a positive balance of payments in 2020 and 2021.
In a press release announcing renewal of a federal greenhouse gas research grant at Stony Brook University in Suffolk County, New York, the district’s Congressman, Nick LaLota, R-N.Y., said he was pleased that the federal government had acknowledged Stony Brook’s work, but expressed disappointment with the amount of money New Yorkers generally receive back from their federal taxes.
"For every dollar in federal taxes my constituents pay, we get a mere 93 cents back," said LaLota, whose district includes Stony Brook. "That is unacceptable and a reason why I will always fight to make sure that Suffolk County receives our fair share of federal funding."
Experts told PolitiFact that LaLota is on target about the general historical pattern for New York, but they added that 2020 and 2021 reversed that pattern because of unprecedented coronavirus relief payments that dramatically increased the flows of federal funds to households, businesses, and state and local governments.
Laura Schultz, executive director of research at the Rockefeller Institute of Government, an Albany, New York-based think tank, said that between 2015 and 2019, New York never received more than 87 cents back for each dollar its residents sent to the federal government.
A New York state comptroller’s office analysis found a slightly different number for 2018 — 91 cents back in federal spending for every dollar spent. By contrast, the report said, the national average was $1.24, meaning that the average state received more money back than it paid into the federal treasury.
For 2019, the report found showed New Yorkers receiving 90 cents back for every federal tax dollar.
These were typical numbers going back years, said Edmund J. McMahon Jr., founder and senior fellow of the Empire Center for Public Policy, a right-of-center think tank based in Albany. A number close to what LaLota "has been accurate for decades," McMahon said.
A state such as New York has a large concentration of high-income and affluent residents, McMahon said, which means it will generate higher aggregate federal tax revenue than most other states.
The ratio temporarily became inaccurate, however, because of the enormous flow of federal pandemic bailout relief.
The comptroller office’s data for 2020, the first year to reflect pandemic era spending, New York received $1.51 for every dollar paid in federal taxes.
"2020 was the first year of our analysis in which no state had a negative balance of payments," the Rockefeller Institute’s Schultz said. That continued in the pandemic’s second year, 2021.
LaLota’s office acknowledged that pandemic relief temporarily skewed the balance of payments for New York. But they said they were using the historical baseline.
"That fact, as demonstrated by multiple publicly available studies, is for years and years New Yorkers have paid significantly more in taxes than they get back in federal dollars, especially compared to other states," said Will Kiley, a LaLota spokesperson. "This imbalance was temporarily interrupted during the height of COVID spending. At this point, any data that continues to take COVID spending into account is simply misleading and distracts from the harsh reality that New York taxpayers routinely get hosed by Washington."
There is a data lag for calculating balance of payments data, so 2022 figures are not yet available. But with pandemic relief phased out, New York’s balance of payments is expected to hew more closely to its historical average.
LaLota said, "For every dollar in federal taxes my constituents pay, we get a mere 93 cents back."
Something in that range has been the longstanding norm for New York residents, experts agree.
However, during the pandemic, New York’s balance of payments tilted toward the state for the first time. Experts expect this pattern to revert to its traditional ratio after pandemic aid is phased out.
We rate this statement Mostly True.
Nick LaLota press release, LaLota Announces Renewal of Research Grant at Stony Brook, March 29, 2023
State Comptroller, New York’s Balance of Payments in the Federal Budget: Federal Fiscal Year 2021, April 2023
State Comptroller, New York’s Balance of Payments in the Federal Budget: Federal Fiscal Year 2019, November 2020
Moneygeek.com, The States That Are Most Reliant on Federal Aid, April 2, 2023
Rockefeller Institute of Government, "Giving or Getting? New York’s Balance of Payments with the Federal Government," March 2023
Email Interview with Edmund J. McMahon Jr., founder and senior fellow of the Empire Center for Public Policy, May 8, 2023
Email Interview with Laura Schultz, executive director of research at the Rockefeller Institute of Government, May 8, 2023
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