New York’s tax receipts were $6.8 billion less than this time last year as revealed in the monthly State Cash Report released by Comptroller Thomas P. DiNapoli, who cautioned that the state's fiscal outlook remains uncertain due to mixed signals from the economy.
DiNapoli noted that although inflation has eased and hiring has remained steady in the Empire State, consumer spending has slowed, and tax collections are showing signs of weakness.
Personal income tax (PIT) receipts totaled $14.5 billion, falling $128.4 million short of Division of Budget’s (DOB) projections. Compared to the same period in 2022-23, PIT receipts were $7.1 billion lower, primarily due to slower income growth and financial market volatility in 2022, which impacted collections from tax returns filed in April and May, according to DiNapoli.
Year-to-date consumption and use tax collections amounted to $5.4 billion, representing a 5.9% increase of $302 million compared to the same period last year. However, these collections were $9.5 million lower than DOB's anticipated figures. Sales tax receipts, the largest component of these taxes, experienced a notable increase of $288 million, or 6.2%. Business taxes, including collections from the pass-through entity tax (PTET), however, reached $6.7 billion, which was $123 million lower than the prior fiscal year's June figures, but exceeded financial plan projections by $628 million.
Total state spending across all funds for the period through June amounted to $58.6 billion, marking an $9 billion, or 18.3%, increase compared to the same period last year. The rise in spending was primarily driven by higher Medicaid costs. However, spending from all funds was $292.5 million lower than DOB's projections, largely due to lower-than-expected spending from capital project accounts. Spending from state operating funds totaled $30.4 billion, reflecting a $3 billion, or 11.1%, increase compared to the previous year.
“It’s no surprise that state finances are in the shape they’re in,” said Assemblyman Joseph DeStefano (R-C-Medford), a frequent critic of runaway state spending. “You have politicians in Albany that think taxpayers are a never-ending supply of money. It’s no wonder they’re bailing out of New York in droves leaving the rest of us to pick up the tab.”
While the state's tax receipts for the first quarter of SFY 2023-24 exceeded expectations, the significant decline compared to the previous year raises concerns about the overall economic recovery following the COVID outbreak and the locking down of the state’s economy.
DiNapoli also reported that the state retirement system, which he manages for more than a million state and local government employees—many on Long Island—recorded a loss of $2.5 billion on its investments during the previous fiscal year. Unlike the private sector, the state can simply raise taxes to make up the shortfall. "This investment loss is a significant setback for the New York State Pension Fund and its beneficiaries," DiNapoli stated. The pension fund, which is on the hook for guaranteed lifetime payments to its retirees, contains about $250 billion.
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| Comptroller Thomas P. DiNapoli File Photo |