ALBANY, N.Y. ---- Downstate gives more to the state in taxes and revenues than it gets back in expenditures for services and other assistance. Upstate, on the other hand, gets more than it gives.
That's according to a new report by the Rockefeller Institute of Government, analyzing the regional distribution of revenues collected and dollars spent within the New York State budget. The report, Giving and Getting, examines actual receipts and expenditures for the 2009-10 fiscal year.
The study considered "state funds" only, excluding federal assistance and state expenditures supported by such aid. Institute researchers looked at four regions in the state:
- New York City;
- The five suburban counties that are most closely linked to the city geographically and economically ---- Nassau, Suffolk, Westchester, Rockland and Putnam;
- The Capital Region (Albany, Rensselaer, Saratoga and Schenectady counties); and
- The state's remaining 48 counties.
Researchers considered alternative methods for calculating regional allocations of the personal income tax and selected expenditures. In each case, the analysis shows that New York City and the Downstate suburbs contribute far more to Albany in taxes and other revenues than they receive in state-funded expenditures.
In addition to examining the amounts given and received by each region, the report includes demographic factors that are important for understanding the broader context in which dollars are collected and spent, including a region's total population, personal income and numbers of individuals living in poverty. Overall, state tax payments and expenditures show clear ---- if imprecise ---- relationships to distribution of personal income and poverty.
The share of local assistance spending (including state funding for Medicaid, education and social programs) in New York City, for instance, was higher than the city's 42.9 percent share of population ---- but influenced by its relatively higher share of state residents living in poverty. The city's share of income tax payments is also relatively high compared to its share of the population, but close to its share of personal income in the state.
"This report's findings reveal a special capacity of state government," said Thomas Gais, director of the Rockefeller Institute. "A state can move money from one region to another in ways that local governments cannot. New Yorkers may disagree on whether the current balance of giving and getting is the best one. Our report does not directly answer that question. But it provides a well-documented, empirical basis for a public conversation over the purposes and effectiveness of state revenues and expenditures ---- a conversation, we hope, that will not divide our communities but help all our regions understand how their respective roles can be knit together to serve New York's common interests."
However calculated, New York City's share of state taxes and other revenues topped 45 percent of the state total, while around 40 percent of total expenditures went to the city. If New York City's share of state-funds expenditures had been the same as its share of state-funds revenues, the city would have received $4.1 billion to $6.1 billion more than it did in 2009-2010, the study found.
The Downstate suburbs' contribution to state coffers totaled at least 23.6 percent, but the region received around 18 percent of total state funding. The region would have gained $4.6 billion to $7.9 billion if its share of state-funds expenditure had matched its share of revenues, according to the Institute.
By contrast, 48 Upstate counties (excluding the Capital Region) paid around 24 percent of the state's taxes and other revenues, and received 35 percent of state dollars in return. The area would have lost an estimated $8.1 billion to $9.3 billion if its share of revenues were matched to its share of funding.
The Capital Region contributed just under 4 percent of the state's total, and was the beneficiary of 7 percent of state spending. Its loss would have totaled $2.7 billion if its share of revenues were the same as its share of funding.
The report further breaks down regional contributions to state funding by type of tax ---- income, sales, corporate taxes and others. It also examines categories of state spending ---- local assistance, state agency operations and capital expenditures.
Because the study excludes federal funding, less than half of the state's total Medicaid expenditures in 2009-10 are included in the analysis. New York City receives more than 60 percent of all Medicaid spending in the state, and its share of overall expenditures would rise significantly if federal funds were included. However, the city also contributes a relatively high share of federal tax payments from the state, and such payments are also excluded from the analysis.
The report was commissioned by the Citizens Budget Commission as part of its ongoing monitoring of the fiscal standing of New York State and New York City, and supported by a grant from the New York Community Trust. The research is intended to lay better groundwork for state fiscal policy discussions, which are often fraught with uninformed assumptions about how state resources are distributed.
For a full copy of the report, visit www.rockinst.org.