The DOB’s assumed growth rates for State revenue are unusually low by historical standards, and are out of sync with most forecasts of U.S. economic growth over coming years. FPI expects State revenue growth in fiscal year 2025 will likely exceed current forecasts by at least $4 billion.
The New York State Senate and Assembly will soon release their proposals for the fiscal year 2025 budget. Following last week’s revenue consensus, the legislature will be able to propose $1.3 billion more in spending than the executive budget. This additional revenue will allow the legislature to restore many of the budget cuts proposed by the executive budget, especially to school aid and home care. The legislature can, however, go beyond restoring the proposed cuts and put forward deeper investments in public services that address New York’s affordability crisis. These investments will require raising additional revenue.
New York State often faces calls for higher tax revenue, whether due to concerns over revenue shortfalls or a desire to increase public spending. This brief assesses the soundness of raising revenue through the Personal Income Tax, examining the fiscal stability of such revenue, fundamental fairness considerations, and responses to common arguments against raising the state income tax.
Over the past five budget cycles, the upward revisions to revenue established at the Economic and Revenue Consensus meeting has ranged from 0.6 percent to 1.9 percent of annual state operating funds. While these numbers may seem small in magnitude, the dollar amounts are significant when compared to current cost saving measures proposed in the fiscal year 2025 executive budget. Annualized revenue adjustments average $972 million over the past 6 budget cycles (excluding 2020) compared to a proposed $454 million in school aid cuts and $600 million in cuts to the homecare program CDPAP in this year’s executive budget.
ALBANY, NY | February 13, 2024 The Fiscal Policy Institute released its annual briefing on the Governor's executive budget. The briefing analyzes state fiscal and economic trends as well as major policy initiatives in the executive budget. Download the Book
"Improving tax receipts and new State aid, combined with lower asylum seeker costs and the customary use of annual reserves, are more than sufficient to balance next year’s budget" ALBANY, NY | In response to the New York City Preliminary Budget for Fiscal Year 2025, Fiscal Policy Institute Director Nathan Gusdorf released the following statement: “Given the City’s improving fiscal outlook, the Mayor’s continued budget cuts are both unwarranted and fiscally irresponsible. “Improving tax receipts and new State aid, combined [...]
FOR IMMEDIATE RELEASE: January 16, 2024 Media Contact: press@fiscalpolicy.org June Cash Receipts Continue to Stabilize Following April Volatility "Given recent inflation and economic growth, state spending is shrinking slightly relative to the size of the overall state economy" ALBANY, NY | In response to the New York State Executive Budget for Fiscal Year 2025, Fiscal Policy Institute Director Nathan Gusdorf released the following statement: “After months of overly pessimistic revenue projections, the Executive Budget [...]
By Andrew Perry, Senior Policy Analyst January 2024 Approximately $2.4 Billion of FY28 budget gap will be due to the Personal Income Tax and Corporate Franchise Tax surcharge expirations. In the fiscal year 2022 budget, New York enacted temporary increases to the personal income tax (PIT) and corporate franchise tax (CFT) rates. PIT rates were raised for tax filers with more than $1 million in annual income, and new brackets were created for filers with incomes over $5 million [...]
FOR IMMEDIATE RELEASE: January 9, 2024 Media Contact: press@fiscalpolicy.org June Cash Receipts Continue to Stabilize Following April Volatility New York’s current fiscal indicators are stable & show State could significantly increase public investment Current $4.3 billion FY25 budget gap falls within routine range that resolve without major policy intervention ALBANY, NY | In response to Governor Hochul's State of the State, Fiscal Policy Institute Director Nathan Gusdorf released the following [...]
January 9, 2024 Toplines The November financial plan made significant revisions to the FY25 budget gap — shrinking the gap from $9.1 billion to $4.3 billion, resulting in more routine gaps. The current FY25 budget gap of $4.3 billion is a moderate, not extreme, budget gap. Moderate outyear budget gaps are generally the result of conservative revenue estimates intended to ensure fiscal stability. Conservative budget forecasting is a sound fiscal practice that protects against economic downturns — not a [...]
November receipts 10.7% above latest projections and 9% above November 2022 receipts
December 11, 2023 Submitted to the New York City Council Committee on Finance Good morning — I am Andrew Perry, Senior Policy Analyst at the Fiscal Policy Institute, a nonpartisan research organization committed to improving public policy to better the economic and social conditions of all New Yorkers. Overview: New York City faces real fiscal strain in the current fiscal year and next year. However, projected gaps are the result of an unexpected and temporary fiscal shock – the [...]
A groundbreaking new report from the Fiscal Policy Institute, “Who Is Leaving New York State? Income Trends” reveals for the first time that the richest New Yorkers are far less likely to move out of New York than working and middle-class New Yorkers in normal, non-Covid years. While this pattern temporarily changed during Covid, when all households earning over $170,000 significantly increased their likelihood of moving out of state, migration trends reverted to normal in 2022.
October receipts 5.6% above latest projections and 7.5% above October 2022 receipts
As FPI projected earlier this month, Financial Plan update reduces projected FY 2025 budget gap by over 50 percent If current revenue trends continue, next fiscal year's projected budget gap would further narrow