Historic relief funds from the federal government, provided in response to the COVID-19 pandemic, boosted New York’s per capita balance of payments from Washington from second-to-last in federal fiscal year (FFY) 2019 to 40th in FFY 2020 among states, according to a report released by New York State Comptroller Thomas P. DiNapoli. New York received $146 billion, or $7,236 per capita, more in federal spending than residents paid in total taxes to the federal government in FFY 2020. Overall, the state received 6.4% of total federal spending compared to 5.9% it received last FFY. He noted that all states had a positive balance of payments for FFY 2020 due to the unprecedented influx of federal relief aid.

Prior to FFY 2020, the gap between the taxes New Yorkers paid and the spending the state received has fluctuated, but it remained consistently negative over DiNapoli’s five previous fiscal analyses, ranging from $19.9 billion in FFY 2013 and up to $40.9 billion in FFY 2016. The late Sen. Daniel Patrick Moynihan pioneered the concept of this balance of payments analysis when he represented New York in the U.S. Senate, believing that this work could help produce a more equitable outcome for all Americans.

“The influx of federal relief funds was critical to helping states manage through the pandemic, but the money is temporary,” DiNapoli said. “Federal aid helped stabilize New York’s economy, but it is finite and will not resolve the long-standing imbalance of payments among the states. As federal pandemic spending winds down, the underlying trends we saw pre-pandemic are likely to return, with New York giving more to Washington than it gets back. As our rebuilding process continues, more must be done to achieve a more equitable distribution of federal funds to New York.”

For every tax dollar paid to Washington, New York received $1.59, an increase from 91 cents the prior year, but still below the national average of $1.92. Under this measurement, New York ranks 44th for FFY 2020. New Jersey received the least amount for every tax dollar paid at $1.36, while at $3.66, New Mexico netted the biggest return, as it has for the last five years.

New York generated 7.8% of the $3.2 trillion in tax payments to the federal government in FFY 2020. Compared to FFY 2019, tax dollars from New York fell at a rate more than twice the national average, reflecting in part the impact of the pandemic, including a decline of 11% in individual income tax payments from New Yorkers, compared to a national decline of 6.4%.

The state’s per capita federal taxes were 27.6% higher than the national average, ranking it fourth behind New Jersey, Massachusetts and Connecticut. In total, New Yorkers paid about $250 billion in FFY 2020 compared to $265 billion in FFY 2019, ranking third among the states behind California and Texas.

Federal spending in New York, including grants to state and local governments as well as direct payments to individuals, rose more rapidly than in other states. In total, New York received $19,589 in per capita federal spending, ranking above two-thirds of the states. This amount was 5% higher than the national figure of $18,599 per capita. New York's ranking rose to 17th in federal spending among the states in FFY 2020 from 24th in 2019. The improvement was primarily due to increased temporary federal grant and non-grant spending in response to the pandemic.

Direct payments to individuals for Social Security, Medicare, veterans’ benefits, food assistance and more made up the largest category of federal payments to the states in FFY 2020, totaling over $3.6 trillion, or 58%. This category increased by more than $1 trillion compared to FFY 2019, including large amounts of pandemic-related unemployment compensation and relief payments to households, which was more than 20% of spending in this category. New York received an estimated $228.3 billion in direct payments to individuals, with a per capita figure that was moderately higher than the national average.

Report
New York’s Balance of Payments in the Federal Budget, Federal Fiscal Year 2020
Interactive Map with Balance of Payments Breakdown in the United States

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