NEW YORK STATE'S BALANCE OF PAYMENTS WITH WASHINGTON
The federal government's tax revenues in each state are heavily influenced by the relative wealth of the state. Because New York is relatively wealthier than most other states, it sends proportionately more tax dollars to Washington than almost any other state. Some federal spending programs, such as Medicaid, are also influenced by the relative wealth of states.
While representing the Empire State in Washington, Senator Daniel Patrick Moynihan reported each year on New York's imbalance of payments with the federal government. In late 2001, The Public Policy Institute examined the data previously studied by Senator Moynihan to prepare an updated analysis. For fiscal 2000, the Institute found, New York suffered a deficit of some $47 billion in the balance of federal tax dollars and federal spending.
In fiscal 2001, as the attached table shows, New York continued to send far more dollars to Washington than it received in return. The state's deficit was $39.6 billion. Tax revenues the federal government collected on economic activity in New York – more than $166 billion – were roughly the same as in the previous year. The state collected nearly $127 billion in federal spending, an increase of some $7 billion that was driven largely by higher payments for Social Security, Medicare and education.
For the study, base data on tax revenue are from the Tax Foundation, a nonpartisan research group based in Washington. The Public Policy Institute allocates to New York State $8.1 billion in federal tax payments from individuals who live in New Jersey or Connecticut but work in New York. New Jersey residents paid $81 billion, and Connecticut residents $39 billion, in federal taxes. Approximately 7 percent of federal taxes collected in New Jersey, and 6.4 percent of those from Connecticut, are attributable to jobs in New York State, according to New York State Department of Taxation and Finance estimates for state taxes paid by New Jersey and Connecticut residents.
Base data on expenditures are from the U.S. Census Bureau's Consolidated Fiscal Funds Report for Fiscal Year 2001. In addition, The Public Policy Institute allocates to each state a share of the total interest paid domestically on federal debt during the year, based on the state's share of total federal tax payments. The total of such interest in federal fiscal year 2001 was $131 billion; New York's share, for example, was 8.1 percent of the total, or $10.6 billion.
States' Balance
of Payments with Washington, 2001 (dollars in millions) |
|||
Taxes Paid |
Spending Received |
Surplus/Deficit |
|
| Alabama | 22,437 |
33,205 |
10,768 |
| Alaska | 4,200 |
6,685 |
2,485 |
| Arizona | 30,057 |
32,392 |
2,335 |
| Arkansas | 12,476 |
17,469 |
4,993 |
| California | 264,344 |
206,245 |
-58,099 |
| Colorado | 33,898 |
26,618 |
-7,280 |
| Connecticut | 36,416 |
25,351 |
-11,065 |
| Delaware | 5,750 |
4,632 |
-1,118 |
| Florida | 110,294 |
107,395 |
-2,899 |
| Georgia | 52,225 |
50,822 |
-1,403 |
| Hawaii | 6,903 |
10,185 |
3,282 |
| Idaho | 6,683 |
7,977 |
1,294 |
| Illinois | 96,686 |
71,520 |
-25,166 |
| Indiana | 36,733 |
34,630 |
-2,103 |
| Iowa | 16,725 |
18,523 |
1,798 |
| Kansas | 16,503 |
17,806 |
1,303 |
| Kentucky | 20,509 |
27,210 |
6,701 |
| Louisiana | 21,371 |
29,249 |
7,878 |
| Maine | 6,904 |
8,643 |
1,739 |
| Maryland | 41,779 |
50,966 |
9,187 |
| Massachusetts | 59,779 |
48,188 |
-11,591 |
| Michigan | 67,886 |
56,185 |
-11,701 |
| Minnesota | 36,519 |
27,384 |
-9,135 |
| Mississippi | 12,094 |
21,023 |
8,929 |
| Missouri | 33,718 |
41,452 |
7,734 |
| Montana | 4,359 |
6,910 |
2,551 |
| Nebraska | 10,415 |
11,469 |
1,054 |
| Nevada | 15,014 |
10,631 |
-4,383 |
| New Hampshire | 10,315 |
7,006 |
-3,309 |
| New Jersey | 75,115 |
51,657 |
-23,458 |
| New Mexico | 8,487 |
17,156 |
8,669 |
| NEW YORK | 166,554 |
126,990 |
-39,564 |
| North Carolina | 47,579 |
47,748 |
169 |
| North Dakota | 3,288 |
6,169 |
2,881 |
| Ohio | 69,127 |
66,341 |
-2,786 |
| Oklahoma | 16,667 |
23,790 |
7,123 |
| Oregon | 21,241 |
19,826 |
-1,415 |
| Pennsylvania | 83,052 |
84,880 |
1,828 |
| Rhode Island | 6,990 |
7,458 |
468 |
| South Carolina | 20,799 |
26,070 |
5,271 |
| South Dakota | 4,293 |
6,095 |
1,802 |
| Tennessee | 33,225 |
38,986 |
5,761 |
| Texas | 134,809 |
121,571 |
-13,238 |
| Utah | 11,358 |
12,139 |
781 |
| Vermont | 3,731 |
3,984 |
253 |
| Virginia | 52,858 |
74,802 |
21,944 |
| Washington | 49,651 |
40,233 |
-9,418 |
| West Virginia | 7,793 |
13,064 |
5,271 |
| Wisconsin | 34,609 |
28,966 |
-5,643 |
| Wyoming | 3,583 |
3,824 |
241 |