New York state is reeling from a COVID-era exodus to low-tax locales as revenue during this fiscal year is down nearly 20%, according to a report.
New York and California saw the steepest drops in tax-generated revenue this fiscal year while Florida and Texas saw their coffers fill up thanks to a pandemic-fueled migration.
New York has collected 19.5% less in levies while California has seen its state tax revenue fall by a whopping 24.9%, according to data revealed by Bloomberg News.
Meanwhile, Texas reported a 12.2% growth in state tax revenue while Florida has collected 9.9% more in levies so far this fiscal year, according to the data compiled by Urban-Brooking Tax Policy Center.
In Texas, the windfall has translated into a record $33 billion surplus, prompting Gov. Greg Abbott to seek tax cuts.
The disparity can be explained by the shrinking tax bases of New York and California.
Each state saw their populations fall by nearly 300,000 residents in the year ending last July — while Florida and Texas added 888,000 collectively, according to Census Bureau data.
Recently released data from the Internal Revenue Service show that New York and California lost a total of more than $90 billion in income during the pandemic as residents fled to areas with a cheaper cost of living.
New York lost $25 billion in adjusted gross income in 2021 and $20 billion in 2020, while California reported a net loss of $29 billion in 2021 and $18 billion in 2020.
In total, the two states lost $92 billion in two years.
On the other end of the spectrum, Florida brought in $39 billion in income in 2021 — a significant increase from the $28 billion it generated the year prior.
Palm Beach County alone reported an $11 billion gain in income in 2021, the IRS said.
New York is staring down the barrel of budget deficits after federal COVID money dried up.
The recently released state budget financial plan projects budget gaps of $5.1 billion in fiscal year 2025, $8.6 billion in fiscal year 2026, and $7.2 billion in fiscal year 2027 — totaling $21 billion.
Meanwhile, California lawmakers this week approved a $310.8 billion budget that closes a nearly $32 billion budget deficit while also extending a lucrative tax break for the state’s film and television industry.
The nation’s most populous state has had combined budget surpluses of well over $100 billion in the past few years, enabling the Democrats in charge to greatly expand government.
But this year, revenues slowed as inflation soared and the stock market struggled.
California gets most of its revenue from taxes paid by the wealthy, making it more vulnerable to changes in the economy than other states.
Last month, Democratic Gov. Gavin Newsom estimated the state’s spending would exceed revenues by more than $30 billion.
With Post wires
Credit: Source link
