Tax policy in New York encompasses the personal income, corporate, and property taxes levied by the state and city to fund government services and infrastructure. This page covers CBC’s work on tax competitiveness, the impact of federal tax law changes, MTA funding mechanisms, pension-related tax pressures, and strategies for maintaining fiscal stability without raising tax rates.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The City should take this opportunity to evaluate the pied-à-terre tax's impact on property values, transactions, supply, ownership patterns, and tax revenues.
The City should evaluate the broader impacts of changes in supply and ownership from the pied-à-terre tax on all revenues and City spending, not just on property taxes.
To ensure sound tax policy administration, governments should provide adequate legislative vetting, sufficient implementation time, clear communication, and ongoing evaluation based on evidence.
The City should communicate more clearly regarding tax eligibility letters, explaining who receives them, why additional information is needed, and the next steps.
New York State leaders should reject proposed personal income, corporate income, unincorporated business, pass-through entity, and real property transfer tax increases.
New York State should enact the lower-income tax credit for filers with dependents, supported by spending offsets.
New York State should reject economic development spending unless it has proven effective, including the NYC Musical and Theatrical Production Tax Credit.
Key Data
According to an April 2026 analysis, New York State and its localities collect more taxes per person than any other state, exceeding collections in New Jersey by 38% and California by 40%.
A March 2026 report highlighted that New York's share of the nation's millionaires plummeted 31% between 2010 and 2022, costing the State and City more than $13 billion in potential personal income tax revenue.
In November 2025, the CBCNY noted that New York City's top earners faced combined state and city personal income tax rates ranging from 13.5% to nearly 14.8% for households with adjusted gross incomes over $2.2 million.
In July 2024, the CBCNY reported that the School Tax Relief (STAR) program costs $3 billion annually, providing about $2,000 per student in wealthy counties but only $500 per student in Jefferson County.
In fiscal year 2024, New York collected 71% more taxes per person than the national average and eclipsed second-place California by 22%, making it the nation's highest-taxing state. To remain competitive and attract residents and businesses, New York must hold the line on or reduce taxes while focusing on improving the quality and efficiency of public services.
Recommendations related to Tax Policy
Given that it is already top of the charts, New York should hold the line on or preferably reduce taxes.
New York should hold the line on taxes where possible, reducing them where feasible, and ensuring public dollars produce stronger results.
Key Data
71%
— Amount of taxes per person New York collected above the national average in fiscal year 2024.
22%
— Amount by which New York's fiscal year 2024 per-capita tax collections eclipsed second-place California.
94%
— Amount of personal income tax per $1,000 of income New York collected above the national average in fiscal year 2024.
46%
— Amount by which New York's fiscal year 2024 tax collections per $1,000 of personal income exceeded the U.S. average.
43%
— Amount of corporate taxes per $1,000 of state gross domestic product New York collected above California in fiscal year 2024.
47%
— Amount of corporate taxes per $1,000 of state gross domestic product New York collected above New Jersey in fiscal year 2024.
The implementation of New York's new pied-à-terre tax has faced significant challenges due to limited public vetting, a compressed eight-month timeline, and poor communication, including confusion surrounding 17,000 letters sent to potential taxpayers. To improve tax administration, the city should evaluate the policy's impact on property values, transactions, and revenues to inform future property tax reforms.
Recommendations related to Tax Policy
The City should take this opportunity to evaluate the pied-à-terre tax's impact on property values, transactions, supply, ownership patterns, and tax revenues.
The City should evaluate the broader impacts of changes in supply and ownership from the pied-à-terre tax on all revenues and City spending, not just on property taxes.
To ensure sound tax policy administration, governments should provide adequate legislative vetting, sufficient implementation time, clear communication, and ongoing evaluation based on evidence.
The City should communicate more clearly regarding tax eligibility letters, explaining who receives them, why additional information is needed, and the next steps.
Key Data
17,000
— Letters sent to property owners whose properties may be subject to the pied-à-terre tax.
The budgets are in. Now find out what matters. With the Fiscal Year 2027 New York State and New York City budgets finalized, CBC invites you to a timely briefing with our research staff on what the budgets mean for New York's fiscal outlook. We'll highlight the most significant policy…
New York City faces significant economic challenges, including high outmigration and business losses, exacerbated by having the nation's highest combined personal income and business tax rates. To maintain competitiveness and ensure prosperity, the city must prioritize fiscal efficiency and avoid further tax increases while improving government service delivery.
Recommendations related to Tax Policy
The mayor and City Council should adopt a sound budget that improves services, expands effective programs, eliminates ineffective ones, enhances affordability and holds the line on taxes.
Key Data
38%
— New York State and its localities collect more taxes per person than anywhere else, which is 38% more than New Jersey.
40%
— New York State and its localities collect more taxes per person than anywhere else, which is 40% more than California.
New York State and its localities already collect the highest taxes per capita in the nation, yet the fiscal year 2027 budget proposals include numerous personal income, corporate, and property tax increases. To preserve economic competitiveness and prevent further loss of high earners, these proposed tax hikes should be rejected in favor of targeted relief like a $211 Million lower-income tax credit.
Recommendations related to Tax Policy
New York State leaders should reject proposed personal income, corporate income, unincorporated business, pass-through entity, and real property transfer tax increases.
New York State should enact the lower-income tax credit for filers with dependents, supported by spending offsets.
New York State should reject economic development spending unless it has proven effective, including the NYC Musical and Theatrical Production Tax Credit.
Key Data
40%
— Amount by which New York State and localities collect more taxes per capita than California.
31%
— Decline in New York's share of the nation's millionaires between 2010 and 2022.
$13 Billion
— Additional personal income tax revenue the State and City would have collected had New York's share of millionaires stayed at 2010 levels.
$211 Million
— Foregone tax revenue cost of the Assembly's proposed tax credit to eliminate personal income tax liability for many filers with dependents.
$150 Million
— Proposed increase for the New York City Musical and Theatrical Production Tax Credit.
21.37%
— New York City's combined business tax rate under the Assembly's proposed corporate tax rate increase.
Enhancing Tier 6 pension benefits would cost the State, local governments, and school districts billions of dollars annually, likely forcing property tax increases or service reductions. These proposed changes threaten to destabilize local budgets and bypass the State’s property tax levy cap, which includes exemptions for significant growth in pension contribution rates.
Recommendations related to Tax Policy
New York State should not enhance Tier 6 pension benefits, as the expansions would likely drive property tax increases or siphon money from other programs.
State leaders should address lower pay and challenging work conditions in hard-to-fill jobs rather than enhancing Tier 6 pension benefits.
State leaders should reveal the cost of proposed pension enhancements before considering spending billions of dollars of New Yorkers’ money.
Key Data
$438 million
— Annual cost of Tier 6 enhancements enacted in 2022 and 2024 to State and local governments.
$700 million
— Annual cost of a 2022 estimate for just one of the additional proposed changes to reduce progressive employee contributions.
2 percentage points
— The threshold for growth in pension contribution rates that triggers an exemption to the State’s property tax levy cap.
New York City's fiscal challenges stem from excessive spending growth rather than insufficient revenue, making tax increases counterproductive to the city's competitiveness. Instead of raising taxes, the city should focus on operational improvements, productivity, and service redesign to close budget gaps.
Recommendations related to Tax Policy
The City should avoid raising taxes, as tax increases are unlikely to advance shared objectives and would weaken the City’s competitiveness.
Key Data
$2.3 billion
— The amount the City spent more than it received over the past three years, despite strong revenues.
$15 billion
— The estimated amount the City would be spending today if spending growth had merely kept pace with inflation over the last decade.
17 is the number of days, at the time of this conversation’s recording, before Dean Fuleihan becomes First Deputy Mayor for a second time. As Mayor-Elect Mamdani turns from campaigning to the practicalities of governing, First Deputy Mayor Fuleihan will be an expert hand involved in every step. On this…
New York City's high-income residents and businesses already face some of the highest tax rates in the nation, making further increases counterproductive to maintaining the city's economic competitiveness. The current $120 billion budget is sufficient to fund essential services and meet the administration's goals without imposing additional tax burdens.
Recommendations related to Tax Policy
The new administration should signal that NYC is open for business by keeping corporate rates where they are and seeking additional regulatory reforms.
The City should hold the line on taxes because high-income residents and businesses already pay nation-leading rates.
The City’s already-ballooned $120 billion budget should be sufficient to provide high-impact services and deliver progress on the administration’s agenda and New Yorkers’ needs.
Key Data
13.5 percent to nearly 14.8 percent
— Combined State and City income tax rates for households with adjusted gross income greater than $2.2 million.
6.5 percent to 4.2 percent
— The decline in New York City’s share of the nation’s millionaires between 2010 and 2022.
$2.5 billion
— Additional revenue the City would have received in tax year 2022 if its share of the nation's millionaires had remained constant.
17.44 percent
— The top combined marginal corporate tax rate, including the City rate, State effective rate, and MTA surcharge.
To address the $35.4 billion funding gap in the MTA's 2025-2029 Capital Plan, the state should prioritize 'Rebuild and Improve' projects while increasing city and state contributions by $9.0 billion. If additional revenue is required, lawmakers should consider spreading the burden through measures like regionalizing MTA-supporting taxes, increasing the payroll mobility tax, or raising sales taxes to maintain regional competitiveness.
Recommendations related to Tax Policy
The State should increase the City and State contribution by $9.0 billion in pay-as-you-go (PAYGO) financing to help fund critical MTA investments.
Lawmakers may choose to consider options including regionalizing New York City-only MTA-supporting taxes, small increases in the payroll mobility tax (PMT), or small increases in sales taxes to fill the remaining funding shortfall.
The MTA should modestly increase fares, tolls, and vehicle registration fees to generate revenue to support a $6.8 billion investment.
The MTA should focus the Capital Plan exclusively on Rebuild and Improve projects to shrink the funding gap.
The MTA should ensure labor provides the flexibility to generate at least $500 million in recurring operating budget savings needed to support planned debt.
Key Data
$35.4 billion
— The financing gap for the 2025-2029 Capital Plan following the State Fiscal Year 2026 Executive Budget.
$9.0 billion
— The amount of additional pay-as-you-go (PAYGO) financing the City and State should contribute to the capital plan.
$6.8 billion
— The investment amount supported by the proposed modest increases in fares, tolls, and vehicle registration fees.
$500 million
— The amount of recurring operating budget savings labor should provide to support planned operating-budget-backed debt.
$3.6 billion
— The amount of funding saved by removing expansion projects from the capital plan.
$68.4 billion
— The total size of the proposed 2025-2029 Capital Plan.
10 and 15 are the districts represented by New York Congressman Dan Goldman and Congressman Ritchie Torres. With a newly elected President and Congress, changes in federal policy, funding, and regulation will affect New York State and New York City. So, what are the opportunities and challenges ahead? Where can…
New York State faces a $15.6 billion structural imbalance despite an improved economic outlook that has boosted tax receipts by an average of $2 billion annually. To ensure long-term fiscal stability, the state should prioritize increasing reserves to 22 percent of State Operating Funds and utilize additional receipts to close budget gaps rather than relying on temporary measures.
Recommendations related to Tax Policy
The State should make additional deposits now, when receipts are strong, and should transfer the balance of the unprotected Economic Uncertainties Fund into the protected RDR, to ensure these funds are saved for a true emergency.
Additional receipts recognized during the closeout this fiscal year should be deposited into the Rainy Day Reserve.
Higher receipts in the current year should be deposited to the RDR, and additional tax receipts in the out-years should be used to close gaps and reduce the structural imbalance.
Reserves should increase to 22 percent of State Operating Funds based on prior recessions.
Key Data
$2 billion
— Average annual boost in State tax receipts due to an improved economic outlook.
$15.6 billion
— The current structural imbalance in New York State.
$653 million
— The average difference in tax receipt forecasts between the Legislature/Comptroller and the Executive for fiscal year 2026.
$3.2 billion
— Amount set aside to hedge against potential changes in federal tax policy action on the deductibility of State and Local Taxes.
$2.3 billion
— Cash identified as available in the current fiscal year.
$1.9 billion
— Amount used to prepay pension costs.
New York State's practice of enacting pension 'sweeteners' and rolling back Tier 6 reforms is creating significant, unbudgeted fiscal liabilities for state and local governments. These legislative actions increase taxpayer costs without providing commensurate improvements in service quality or efficiency, undermining the fiscal stability established by previous pension reforms.
Recommendations related to Tax Policy
State lawmakers should cut the sweetener habit and should stick to a healthy Tier 6 diet as enacted over a decade ago.
Governors should veto benefit sweeteners that are enacted outside of the budget and collective bargaining processes.
Lawmakers should maintain the valuable Tier 6 reforms, which continue to offer generous defined benefits for public employees.
Key Data
$438 million
— The first-year cost to State and local governments from enacted Tier 6 rollbacks.
$1.5 billion
— The annual price tag of just one proposed Tier 6 rollback.
$19.8 million
— The immediate cost of 11 benefit sweetener bills that the Governor should veto.
$10.3 million
— The annual cost of 11 benefit sweetener bills that the Governor should veto.
$61 million
— The annual pension contribution cost increase to State and local governments from changing the vesting period from 10 to 5 years.
$377 million
— The annual cost increase to State and local governments from changing the final average salary calculation from five years to three years.
The MTA's proposed 2025-2029 capital plan requires a sustainable funding strategy that avoids recurring tax increases while maintaining regional competitiveness. To address the projected $1 billion structural budget gap and finance necessary infrastructure, the state must unpause congestion pricing and prioritize essential system repairs over expansion projects.
Recommendations related to Tax Policy
The State should develop a funding plan that is sustainable—it should not require a new tax increase every five years.
The State should develop a funding plan that does not harm New York’s competitiveness, by balancing the fact that New York already has the nation’s highest taxes and New York needs reliable transit to thrive.
The State should unpause congestion pricing; any alternative makes financing these new projects harder.
Key Data
$8.6 billion
— Proposed and previously planned expansion projects that divert resources from essential rebuilding and improvement efforts.
$10 billion
— Amount of new MTA bonds proposed that are currently considered unaffordable.
$1 billion
— The amount the MTA’s structural budget gap will exceed by the end of the decade.
15 percent
— The portion of an operating budget that is not fully funded, impacting debt affordability.
The School Tax Relief (STAR) program costs New York State $3 billion annually but disproportionately benefits wealthy homeowners, providing about $2,000 per student in affluent counties compared to just $500 in lower-wealth areas. Eliminating this regressive tax relief program would allow the State to redirect critical resources to school districts with the greatest educational needs.
Recommendations related to Tax Policy
New York State should eliminate the School Tax Relief (STAR) program to better allocate State resources to where they are needed most.
Key Data
$3 Billion
— Annual cost of the School Tax Relief (STAR) program, which benefits homeowners in wealthier districts while excluding renters.
$2,000
— Amount of School Tax Relief (STAR) aid provided per student in wealthy counties like Putnam, Nassau, and Westchester.
$500
— Amount of School Tax Relief (STAR) aid provided per student in Jefferson County.
The New York State conceptual budget agreement creates a structural deficit exceeding $16 billion while failing to utilize strong receipt growth to stabilize the state's fiscal foundation. Although the agreement avoids harmful tax increases, it includes unaffordable spending and lacks the transparency of published financial plans required for a full assessment of the $237 billion spending package.
Recommendations related to Tax Policy
The State should reject tax increases on New Yorkers to avoid hurting the State’s competitiveness.
The State should publish basic financial plans as the Legislature votes on the bills to provide a clear view of the full budget picture.
Key Data
$16 billion
— The estimated future structural budget gap resulting from the conceptual budget agreement.
$237 billion
— The total amount of public money reportedly planned for spending in the conceptual budget agreement.
New Yorkers' satisfaction with city government services has declined significantly, with only 11 percent of residents believing the government spends tax dollars wisely, down from 21 percent in 2017. To address these concerns and the city's affordability challenges, the government is encouraged to prioritize high-impact spending and offer tax relief to middle-income households.
Recommendations related to Tax Policy
The City should prioritize spending on high-impact programs that deliver positive results and tackle the range of related policy challenges, and consider how to reduce spending and offer tax relief to middle-income households, who are feeling the City’s unaffordability acutely.
Key Data
11 percent
— Share of New Yorkers who believe the government is spending tax dollars wisely in 2023.
21 percent
— Share of New Yorkers who believed the government was spending tax dollars wisely in 2017.
New York State and its localities lead the nation in tax collections, with residents paying $10,331 per capita and $135 per $1,000 of personal income, figures that significantly exceed national averages. Additionally, the state ranks second in the nation for per capita spending, with expenditures reaching $15,350 per person in 2021.
Key Data
$15,350
— Total state and local expenditure per capita in New York in 2021, which is 50% higher than the national average.
$10,331
— Total state and local taxes collected per capita in New York in 2021, the highest of all states.
$135
— Total state and local taxes collected per $1,000 of personal income in New York in 2021, the highest in the nation.
$3,343
— Total state and local property tax revenue per capita in New York in 2021, which was 76% higher than the national average.
$2,324
— Total state and local sales tax revenue per capita in New York in 2021.
$46
— Total state and local personal income tax per $1,000 of personal income in New York in 2021.
New York's proposed Cap-and-Invest program aims to reduce greenhouse gas emissions through an economy-wide carbon pricing initiative, but its success depends on careful design to balance environmental goals with economic competitiveness. To ensure cost-effectiveness, the state should prioritize broad sectoral coverage, allow for geographic linkage with other programs, and maintain transparent, on-budget revenue management.
Recommendations related to Tax Policy
The State should allow and pursue linkage with other cap-and-invest programs to enhance cost-effectiveness by providing a larger pool of emissions reduction opportunities.
New York should keep sectoral coverage as broad as possible, limiting exemptions to sectors that are exceedingly difficult or expensive to regulate.
The State should maintain flexibility in compliance through trading, banking, and verifiable offsets to ensure the program behaves as a true market.
New York should allocate revenue on-budget, segregating it for uses that promote cost-effective emissions reduction to ensure transparency and accountability.
The State should regularly monitor, publicly report, and evaluate program data to inform necessary programmatic modifications.
The State should align the program with other CLCPA-related regulations to minimize overlapping regulatory costs and improve overall policy effectiveness.
The State should finalize clear and comprehensive rules with adequate time for businesses to prepare to reduce uncertainty and facilitate a smooth carbon market transition.
Key Data
$112,790 Million
— Cumulative auction revenue generated by the European Union's emissions trading system since 2005.
$38,934 Million
— Cumulative auction revenue generated by California's cap-and-invest system since 2013.
$2.1 billion
— New York's share of cumulative revenue from the Regional Greenhouse Gas Initiative.
3 percent
— Estimated increase in the price of allowances if facility-specific caps are implemented to mitigate inter-facility leakage.
$63.03
— Most recent allowance price at auction for Washington's cap-and-invest program as of August 2023.
$35.20
— Most recent allowance price at auction for California's cap-and-invest program as of August 2023.
The Metropolitan Transportation Authority faces significant budget risks due to the uncertainty of dedicated tax revenues, including casino proceeds and economically volatile real estate transaction taxes. To maintain fiscal stability, the agency must continue biennial fare and toll increases while implementing operational efficiencies to close projected budget gaps.
Recommendations related to Tax Policy
The MTA should continue the biennial fare and toll increases to ensure revenues keep pace with operating budget growth.
The MTA should consider whether the General Reserve should be gradually increased to provide a larger buffer against identified revenue risks.
The MTA must continue to identify ways to increase productivity and reduce costs to mitigate reliance on volatile tax revenue streams.
The MTA and stakeholders should closely monitor ongoing revenue results because certain risks, such as volatile tax collections, threaten projected income.
The MTA must implement efficiencies to meet its savings targets to offset potential revenue shortfalls.
Key Data
$1.1 billion
— Annual dedicated taxes provided by the New York State stabilization plan.
44 percent
— Portion of the MTA's 2024 revenues expected to come from taxes.
$500 million
— Statutory minimum license fee generated per casino license.
$62 million
— Amount by which Payroll Mobility Tax collections fell short of forecasts through September 2023.
$927 million
— Projected budget gap by 2027 if all identified risks materialize.
$45 million
— Projected budget gap for 2023 if all identified risks materialize.
The Metropolitan Transportation Authority's operating budget is nearly balanced in the short term due to new revenue sources, including a $1.1 billion annual increase in the Payroll Mobility Tax and future downstate casino revenues. However, a structural budget gap of $900 million is projected to reemerge after the five-year financial plan, necessitating operational reforms to avoid future reliance on extraordinary tax increases or subsidies.
Recommendations related to Tax Policy
The MTA should start now to bring its spending in line with its recurring revenues, lest it return to taxpayers and riders for a new infusion of extraordinary resources in just a few years.
The MTA should not delay and increase the chance it again looks to extraordinary subsidies, taxes, or fare increases to close future budget gaps.
Key Data
$1.1 billion
— Annual revenue from the increase of the Payroll Mobility Tax (PMT) on New York City employers.
$300 million
— One-time State appropriation provided in the NYS Fiscal Year 2024 Enacted Budget.
$165 million
— Annual increase in New York City’s paratransit subsidy.
$231 million
— Annual baseline for casino tax revenue, which is expected to begin in 2026.
$900 million
— Projected annual budget gap that will reemerge after the five-year financial plan window.
NYC Budget Director Jacques Jiha briefed CBC Trustees on the New York City Fiscal Year 2024 Executive Budget. Director Jiha was appointed to serve as Budget Director in October 2020. He oversees New York City’s fiscal policy, including the development of the Expense and Capital Budgets, the City’s bond finance…
New York City faces significant budget gaps that require restructuring and prioritizing high-impact services rather than relying on tax increases or service cuts. Increasing government productivity and streamlining operations are essential to maintaining fiscal stability and service quality without driving further outmigration.
Recommendations related to Tax Policy
The city must thoughtfully rein in its spending by restructuring and prioritizing high impact services, not by slashing programs or pruning low hanging fruit.
The city should avoid raising taxes, as New York is already the country’s outmigration leader and such a move would be the wrong direction.
The city should consolidate welfare-benefit funds to save $150 million from efficiency and purchasing power.
The city should pursue additional savings across government through overtime caps, ambulance staffing changes, and more.
The city should increase government productivity by reorganizing operations, streamlining bureaucracy, and leveraging technology.
Key Data
$17 billion
— Amount of spending added over five years due to agreed-upon employee raises.
$9.7 billion
— Projected budget gap for fiscal year 2025.
$14.5 billion
— Projected budget gap for fiscal year 2027.
$150 million
— Potential savings from consolidating welfare-benefit funds.
$100 million
— Potential annual savings from increasing sanitation productivity.
12%
— Rise in private-sector productivity over the past decade.
New York State faces a $12 billion structural budget problem driven by the expiration of pandemic-era federal aid and the reliance on nonrecurring resources. To avoid future service cuts or damaging tax increases, the state must restrain spending growth and align program costs with available revenues.
Recommendations related to Tax Policy
The State should avoid proposals to increase spending on school aid, childcare, and child tax credits, as well as further suspension of the gas tax.
Reducing State Operating Funds spending growth to 2 percent annually would eliminate the current 2027 budget gap and accommodate the loss of nonrecurring resources, avoiding the need for damaging tax increases.
A well-designed replacement for the now-expired 421-a would help spur affordable and market rate rental housing production and may return as part of this year’s housing agenda.
Key Data
$3.4 billion
— Reduction in annual tax receipts projections for fiscal years 2025 and 2026.
$6 billion
— Reduction in tax receipts projections for fiscal year 2027.
$3.8 billion
— Amount of fiscal year 2027 budget that relies on the final year of the personal income tax (PIT) increase.
The post addresses the MTA's structural budget deficit, arguing that the system's financial stability should be achieved through efficiency improvements rather than tax increases. It warns that New York must maintain competitive tax rates to attract residents and businesses, noting that future budget gaps for the State and City make casual tax hikes a short-sighted solution.
Recommendations related to Tax Policy
Policymakers should avoid casually raising taxes without considering the impacts on families and businesses.
New revenues or subsidies should be sought only with great care to identify trade-offs and impacts.
New York should maintain competitive taxes to attract people and businesses.
Key Data
$6 billion
— Future budget gaps for the State that make casually raising taxes a short-sighted approach.
$10 billion
— Future budget gaps for the City that make casually raising taxes a short-sighted approach.
$0 is the size of the New York State budget deficit in each year of New York State’s five-year Executive Budget financial plan, as proposed by Governor Kathy Hochul. The Governor’s budget proposal balances the budget in each of the next five years, an unprecedented level of fiscal stability for…
NY1 “We have, with the tax increase of last year, the highest top marginal personal income tax in the country, and the highest corporate franchise tax in the country. And we were losing millionaires before the SALT cap. How big a threat are high taxes?” said Andrew Rein of the…
New York's fiscal plan for 2023 relies on an additional $5 billion in annual receipts over the next four years, necessitating a cautious approach to spending to avoid destabilizing future finances. To maintain competitiveness, the state should prioritize rolling back recent tax increases that resulted in the nation's highest combined business and top personal income tax rates.
Recommendations related to Tax Policy
The State should start to roll back last year’s tax increases that made New York’s combined business and top personal income tax rates the highest in the nation.
Key Data
$5 billion
— Additional receipts expected in each of the next four years, dependent on continued economic recovery.
$3.6 billion
— Minimum increase in State operating spending planned for next year.
$25.9 billion
— Total increase in State operating spending over the next five years.
15 percent
— Total amount of state operating funds that the Executive Budget includes as deposits into reserve funds.
Accelerating middle-class tax cuts would provide relief and improve economic competitiveness without creating future budget gaps. Furthermore, allowing previous personal income and business tax increases to expire as scheduled is essential for maintaining long-term economic stability.
Recommendations related to Tax Policy
Accelerating the middle-class tax cuts will provide important relief and help make New York more attractive to individuals and families, while not adding to budget gaps further down the road.
New York will be even more competitive if it allows last year’s personal income and business tax increases to sunset as in law.
The proposed financing plan for the Penn Station redevelopment relies on a complex value capture framework to fund projects estimated to cost up to $17 billion, including $1.3 billion already allocated in the state budget. However, the plan lacks critical details on how payments in lieu of taxes will be calculated and diverts potential property tax revenues from the city's general fund without local approval.
Recommendations related to Tax Policy
New York City should have a substantive role in the planning process and should be a partner that agrees to the use of tax revenue that would otherwise flow to the City’s general fund.
The City still should determine whether and how much of its future tax revenue should be dedicated to a mass transit project instead of other needs like public safety, education, or housing.
There should be a robust discussion about potential tax incentives or abatements for redevelopment projects in the GPP district.
As with all economic development projects, discretionary tax abatements should be considered in context.
Key Data
$17 Billion
— Reported maximum cost of the entire Penn Station project, including renovation, expansion, land acquisition, demolition, and public space improvements.
$6 to $7 Billion
— Estimated cost of a scaled-back Penn Station renovation project without the proposed Penn South expansion.
$1.3 Billion
— Funding included in the State's Fiscal Year 2022 Enacted Budget for Penn Station-related projects.
50%
— Anticipated federal government share of the funding split for the Gateway project, which the Penn Station project is expected to mirror.
25%
— Anticipated New York State share of the funding split for the Gateway project, which the Penn Station project is expected to mirror.
25%
— Anticipated New Jersey share of the funding split for the Gateway project, which the Penn Station project is expected to mirror.
New York City should leverage federal aid to stabilize its long-term fiscal health by implementing recurring savings programs, right-sizing the workforce, and replenishing reserves. These strategies, including requiring employee contributions to health insurance premiums, would help close projected budget gaps while maintaining essential services.
Recommendations related to Tax Policy
The City should phase in employee and retiree health insurance contributions, which would be tax deductible for employees, to reduce recurring labor costs.
The Executive Budget should include $500 million annual deposits to the Rainy Day Fund, or 75 percent of the annual tax revenue growth above 3 percent, whichever is greater.
Key Data
$537 million
— Amount by which actual City tax revenue collections were ahead of plan through February 2021.
2.9%
— Annual average forecast for City tax revenue growth by the Office of Management and Budget.
$560 million
— Total recurring health insurance premium savings for the City from implementing employee and retiree contributions.
$7 billion
— Annual cost to the City for health insurance for employees and retirees.
New York State and City can stabilize their finances and avoid harmful service cuts or tax increases by utilizing federal aid from the American Rescue Plan to restructure government operations rather than funding new programs. By leveraging this federal support alongside labor cost savings, the government can address future budget gaps and maintain essential services without imposing additional tax burdens on residents and businesses.
Recommendations related to Tax Policy
The state could adopt Gov. Cuomo’s budget without its proposed personal income tax increases, and still have an extra $5.9 billion on hand by fiscal year 2023's end.
The state should eliminate unproductive economic development programs and temporarily change financing of some capital programs, all actions that could narrow future budget gaps — without raising taxes.
With the federal aid and the labor savings, the city could halve future budget gaps, preserve crucial services, and fund pandemic-related needs without raising taxes.
Key Data
$5.9 billion
— Extra funds on hand by fiscal year 2023's end if the state adopts the budget without proposed personal income tax increases.
4%
— Projected decline in property tax revenues due to hard-hit real estate sectors.
$25 billion
— Amount of federal funds that will erase more than 40% of the state's pandemic-related four-year revenue shortfall.
40%
— Percentage of the state's pandemic-related four-year revenue shortfall that will be erased by federal funds.
The American Rescue Plan offers a critical opportunity to stabilize New York's finances by using federal aid to address pandemic needs while improving government efficiency. This approach allows the state and city to meet essential service requirements without increasing taxes or creating a tax burden that discourages residents and businesses.
Recommendations related to Tax Policy
The State and City can take care of New Yorkers’ vital needs and stabilize government finances, and critically, do this without raising taxes.
The State and City should ensure that recurring revenues are sufficient to support the critical services New Yorkers want and need, but not so high they risk driving away residents and business.
The State and City should take clear action to increase government efficiency to avoid kicking their fiscal reckoning down the road.
New York State should avoid increasing personal income tax rates or delaying middle-class tax cuts, as these measures are unnecessary given available federal aid and revenue projections. Additionally, the state should reverse the $500 million local government sales tax intercept to improve fiscal stability and economic competitiveness.
Recommendations related to Tax Policy
The State should not increase rates or delay cuts to personal income taxes to ensure New York remains an attractive place for residents and businesses.
Legislators should reject the proposed personal income tax surcharge, as it is unnecessary to close budget gaps and could encourage resident migration.
The State should reject the delay in the middle class tax cut, as proceeding with these reductions would provide necessary relief during the recession.
The Legislature should reverse the $500 million local government sales tax intercept that was enacted last year.
Key Data
$15 billion
— The amount of unrestricted federal aid the Governor asserted was necessary to avoid new tax increases or spending reductions.
$6 billion
— The 'worst case' scenario for forthcoming unrestricted federal aid assumed in the Executive Budget.
40 percent
— The portion of personal income tax receipts provided by the top 1 percent of filers.
$500 million
— The total amount of the local government sales tax intercept enacted last year that should be reversed.
$250 million
— The amount intercepted from county sales tax collections in January 2021.
Managing the City’s fiscal crisis well will be a critically important duty of the next Mayor and a primary determinant of how the city survives the current crisis, and ultimately thrives in the future. Managing NYC’s Fiscal Crisis: A CBC Mayoral Candidate Forum featured a 10-minute conversation with each candidate,…
New York State provides over $800 million in annual tax exemptions that subsidize fossil fuel consumption, which undermines the state's climate goals under the CLCPA. To align fiscal policy with environmental objectives, the state should eliminate or better target these tax expenditures and modify direct spending programs to incentivize renewable energy adoption.
Recommendations related to Tax Policy
The State could limit the residential energy sales tax exemption only to zero emission fuels and renewable energy sources and target benefits to sources that support CLCPA goals.
The State could lower, or gradually eliminate, the sales tax exemptions on fossil fuel-based residential energy sources.
The State could consider eliminating exemptions for fossil-fuel based energy used for non-residential purposes, such as research and development.
The State could explore tailoring tax credit programs to create incentives to incorporate renewable energy into program projects.
The State could consider not reimbursing the cost of installing fossil fuel dependent building infrastructure or vehicles when providing economic development grants.
State aid could incentivize school districts to purchase zero-emission school buses and build the needed charging infrastructure.
Key Data
$800 million
— Annual tax exemptions provided by New York State that reduce the cost of consuming fossil fuels.
$85 million
— Foregone State revenue from the sales tax exemption on the cost of gasoline that exceeds $2 per gallon.
$200 million
— Amount the State spent on utilities for public buildings in fiscal year 2019.
$1.8 billion
— Annual amount the State provides in economic development grants to companies to subsidize expansion or relocation.
$5 billion
— Portion of the State’s budget allocated for school building aid and transportation aid.
$369 million
— Fiscal impact of a partial repeal of the sales tax on residential energy, leaving exemptions for electricity, wood, and renewables.
New York State faces a $58 billion budget gap over the next four years, requiring a transparent plan to balance finances without relying on the accounting shifts that previously obscured spending growth. To address this shortfall, the state should pursue structural changes such as reducing school aid to wealthy districts, eliminating unproductive economic development spending, and walking back tax policy expenditures.
Recommendations related to Tax Policy
The state should consider reducing school aid to wealthy districts to help close the $8 billion budget gap.
The state should prioritize financing capital projects with bond proceeds rather than on a pay-as-you-go basis.
The state should focus on eliminating unproductive economic development spending to balance the budget.
The state should consider walking back tax policy expenditures as a means to close the budget gap.
The state's fiscal plan should not rely on fiscal maneuvers and accounting shifts that have obscured spending growth and exacerbated budget pressures.
Key Data
$58 billion
— Projected budget gaps for the New York State budget over the next four years.
$8 billion
— Amount of to-be-determined State aid to localities reductions included in the gap-closing plan.
$1 billion
— Amount of State agency spending reductions included in the gap-closing plan.
$102.2 billion
— Reported fiscal year 2020 spending in the April update to the financial plan.
$1.7 billion
— Medicaid payments deferred into fiscal year 2020 at the conclusion of fiscal year 2019.
$726 million
— Additional federal Medicaid funding expected as of July 1, 2020.
New York faces significant fiscal gaps, yet its combined corporate franchise and personal income tax rates are among the highest in the nation, threatening economic competitiveness. Relying heavily on high-income earners for revenue has proven risky, as the state's share of national millionaires and their capital gains has declined significantly since 2010.
Recommendations related to Tax Policy
Improving the fiscal outlook for both the State and the City primarily requires controlling expenditures and advocating for federal aid.
Any consideration of tax increases should include the impact on State and local economic competitiveness.
As New York’s leaders look to close budget gaps, they must be cognizant that combined State and City PIT rates are the second highest in the nation, while combined CFT rates are the highest.
Key Data
$8 billion and $15 billion
— Potential budget gaps for New York State in fiscal years 2021 and 2022, respectively.
16.49 percent
— The total effective corporate franchise tax rate for businesses operating in New York City.
12.696 percent
— The combined top personal income tax rate imposed on residents in New York City.
$1.4 billion
— The amount of additional tax revenue New York could have generated if its share of national millionaire capital gains had remained at 2010 levels.
New York State faces significant fiscal gaps that require a combination of spending reductions and revenue-generating measures, including temporary tax policy adjustments. Freezing middle-class tax cuts at 2020 levels and suspending the sales tax exemption on clothing items under $110 could generate substantial resources to help balance the budget.
Recommendations related to Tax Policy
The State should freeze the implementation of middle class tax cuts at the calendar year 2020 rate to preserve revenue.
The State should temporarily suspend the sales tax exemption on clothing items costing less than $110 to generate additional resources.
The State should expand the sales tax base to include services largely enjoyed by middle- and high-income households, such as cosmetology, entertainment, or professional services.
Key Data
$88 million
— The projected revenue from freezing middle-class income tax rates at 2020 levels in fiscal year 2021.
$686 million
— The projected revenue from suspending the clothing sales tax exemption in fiscal year 2021.
$1,050 million
— The projected revenue from freezing middle-class income tax rates at 2020 levels in fiscal year 2024.
$2.0 billion
— The projected revenue from suspending the clothing sales tax exemption in fiscal year 2024.
$774 million
— The total additional resources generated in fiscal year 2021 by expanding the sales tax base through suspending the clothing exemption.
Governments facing fiscal stress should prioritize temporary tax increases that are broadly shared rather than relying on progressive hikes that may drive away mobile high-income earners. To maintain competitiveness, any necessary tax increases should be designed to minimize long-term economic harm while ensuring the burden of catastrophe is widely distributed.
Recommendations related to Tax Policy
Governments should consider raising tax rates temporarily for an emergency period to moderate the impact on competitiveness.
Policymakers should consider making any tax increase relatively small for a broad swath of the population on the grounds that the hardship of a catastrophe should be widely shared.
When designing tax increases, officials should take into account specific circumstances of the jurisdiction at a point and over time to minimize negative impacts on competitiveness.
New York City needs to establish a well-designed Rainy Day Fund to protect against economic downturns, as current savings methods are insufficient to cover potential revenue shortfalls. To ensure fiscal stability, the city should implement strict rules for deposits and withdrawals, including a target fund size of 17.2 percent of tax revenue and mandatory deposits during periods of economic growth.
Recommendations related to Tax Policy
State law should define a recession as two successive quarters of economic decline as indicated by private employment or gross city product.
An emergency should be defined as severe when it is accompanied by a revenue shortfall or expenditure increase equal to or greater than 1 percent of the budget.
Withdrawals from the RDF should be limited to no more than two-thirds of the fund balance in any year, to ensure funds are available for the second year of a recession or emergency.
The City should implement mandatory deposits equal to 75 percent of the tax revenue growth above 3 percent to ensure sufficient funds are accumulated.
The City should establish a target size of 17.2 percent of tax revenue for the RDF, which can serve as a cap on the size of the fund.
Key Data
$1.25 billion
— Amount set aside in reserves for next year.
$6 billion
— Near-term revenue loss estimated by the Office of the New York City Comptroller.
$20 billion
— Three-year shortfall estimated if a recession is similar to those in the recent past.
$9 billion
— Amount that would have been netted in reserves if the recommended strategy had been followed during the last 10 prosperous years.
17.2 percent
— Target size of tax revenue for the RDF, which can serve as a cap on the size of the fund.
71 percent
— Percentage of voters who approved the ballot measure to amend the City Charter to create an RDF.
The New York State Fiscal Year 2021 budget relies on $8 billion in short-term borrowing to manage liquidity needs caused by extended income tax filing deadlines, while continuing various economic development tax credits without evidence of their effectiveness. This fiscal plan faces a potential $15 billion revenue shortfall, necessitating careful management of debt and a reevaluation of nonessential spending programs.
Recommendations related to Tax Policy
The State should evaluate the effectiveness of economic development programs, such as the Film Tax Credit, STARTUP-NY, and the Excelsior Jobs Tax Credit, rather than continuing them without evidence.
The State should ensure that short-term borrowing used to contend with the extension of income tax filing dates is not extended or repaid with long-term debt.
The State should avoid using long-term debt for operating purposes, as it obligates future generations of New Yorkers to pay for today’s services and needs.
Key Data
$8 billion
— Short-term borrowing authorized to cover liquidity needs due to the extension of the income tax filing deadline.
$15 billion
— Estimated revenue loss in the current fiscal year due to economic disruption.
New York's Health Care Reform Act (HCRA) taxes generate nearly $6 billion annually, yet these costs are largely passed on to commercial health insurance purchasers, increasing premiums by at least 4.3 percent or about $1,000 for a family plan. While originally intended for specific public health programs, approximately 80 percent of this revenue is now used to offset the State's Medicaid costs in the General Fund.
Recommendations related to Tax Policy
HCRA tax increases should be avoided as a strategy for balancing the Medicaid budget because that action increases the cost of health insurance premiums and likely depresses wage growth for a majority of New Yorkers.
Lawmakers should review HCRA’s role in health care funding and its impact upon privately insured New Yorkers as they negotiate the budget and evaluate the State’s five-year financial plan.
HCRA taxes should not be increased given the real, significant cost they place upon New Yorkers and the State itself.
It is important for lawmakers to understand the significant impact of HCRA taxes and legislation given the significance of the fund and the potential for changes.
Key Data
$6 billion
— Annual revenue generated by the Health Care Reform Act (HCRA).
4.3 percent
— Combined impact of the Surcharge and Covered Lives Assessment on commercial health insurance premiums.
$1,000
— Statewide average annual cost of HCRA taxes for a family health insurance plan.
80 percent
— Portion of HCRA revenue used in recent years to pay for the State’s share of Medicaid.
$350
— Statewide average annual cost of HCRA taxes for individual health insurance coverage.
$2.5 billion
— State budget savings target the Medicaid Redesign Team is charged with finding.
New York State should maintain its economic competitiveness by avoiding tax increases, including health care taxes, especially since the top 1 percent of personal income tax filers already generate 37 percent of personal income tax revenues. Additionally, the state should reform existing tax incentives by phasing out the $7.3 billion film tax credit and evaluating the cost-effectiveness of the Excelsior Jobs Tax Credit program before extending it for 15 years.
Recommendations related to Tax Policy
The State should avoid tax increases, including health care taxes.
The State should not increase taxes on health care which would make health insurance less affordable.
The State should further reduce the film tax credit by decreasing the share of eligible expenses in 5 percentage point increments until it is completely phased-out.
The State should evaluate the cost-effectiveness of the Excelsior Jobs Tax Credit program before granting a long-term extension and expanding the program.
Key Data
37%
— Percentage of personal income tax revenues paid by the top 1 percent of personal income tax filers.
$1,000
— Annual increase in family coverage costs for New Yorkers due to various health insurance tax surcharges.
$7.3 Billion
— Total subsidies authorized for the film and television industry since the enactment of the State film tax credit in 2004.
25%
— Proposed share of expenses that may be granted as a refundable film tax credit in most instances, down from 30%.
$420 Million
— Proposed increase in the total allocation for the film tax credit.
15
— Number of years the Executive Budget proposes to extend the Excelsior Jobs Tax Credit program.
New York faces a significant fiscal imbalance, and the state should focus on restraining spending rather than increasing taxes, which would harm competitiveness and economic stability. The state's high tax burden, combined with federal tax caps, creates a risk of high-income earners leaving, making it critical to prioritize recurring savings over tax hikes.
Recommendations related to Tax Policy
Increasing taxes now would be counterproductive; it would make New York even more expensive for residents and business, decrease competitiveness, and reduce options to weather the next recession.
The State should hold the line on the State’s already high tax burden.
Retention of the PIT surcharge and other recently enacted taxes narrow options to balance the budget soundly in future recessions; enacting additional tax increases now would make it even harder.
Key Data
48 percent
— New York's State and local tax burden is higher than the national average.
8.82 percent
— New York State’s top marginal personal income tax rate.
12.7 percent
— The top personal income tax rate for New York City residents.
8.49 percent
— New York’s average combined State and local sales tax rate.
$19.3 billion
— The personal income tax liability of taxpayers with incomes greater than $1 million.
Implementing an economy-wide carbon pricing system, such as a carbon fee or cap-and-trade program, can effectively reduce greenhouse gas emissions by providing clear price signals to energy consumers. To ensure these policies are successful and fair, they should be implemented on a regional or national scale and be designed to be revenue neutral by returning funds to taxpayers through lower energy costs or taxes.
Recommendations related to Tax Policy
New York should establish an economy-wide carbon pricing system to deliver effective price signals to energy consumers throughout the state.
To be most effective, carbon pricing policies should be implemented on at least a regional, if not national, scale, so that dollars are directed most effectively toward the dirtiest energy sources and states.
Each state that adopts a carbon fee or cap-and-trade program should aim to be revenue neutral and return funds to consumers through widely available energy programs, lower electric bills, or lower taxes.
Key Data
$167.7 million
— Amount New York received from RGGI auctions in 2015, which was mostly used for energy efficiency programs.
$1.4 billion
— Net present value for the nine RGGI states over the most recent three-year period reviewed.
46 percent
— Reduction in power sector CO2 emissions across RGGI states from 2009 to 2016.
19 percent
— Reduction in power sector CO2 emissions in non-RGGI states from 2009 to 2016.
The federal Opportunity Zone program offers tax incentives for investment in low-income areas, but New York's decision to conform to these rules may cost state and city taxpayers millions in lost revenue without guaranteed public benefits. To address concerns regarding transparency and the potential for subsidizing projects that would have occurred anyway, the state should consider implementing rigorous reporting requirements or decoupling from the federal program entirely.
Recommendations related to Tax Policy
The State can require Opportunity Funds operating in New York State to report on their activity in order to qualify for state tax benefits.
In addition, the State could require funds to report annually on the value of gains invested by New York State taxpayers in qualified opportunity funds.
One option to decouple in part would be to limit the types of OZ projects that would qualify for state tax benefits.
The State could limit benefits to zones that meet both the poverty and family income thresholds, or to those that meet the criteria based on the most recently available Census data.
A third option is to decouple fully from the federal program.
Key Data
$2 billion
— Estimated annual cost of the Opportunity Zone program to the federal government.
$63 million
— Estimated annual fiscal impact of the Opportunity Zone program on New York State.
$31 million
— Estimated annual fiscal impact of the Opportunity Zone program on New York City.
$6 trillion
— Estimated amount of unrealized capital gains held by taxpayers nationally.
$53 billion
— Amount of capital that funds reportedly intend to raise to invest in Opportunity Zone projects as of August 2019.
$9.4 billion
— Total estimated cost of the Opportunity Zone program for federal tax years 2018 to 2022.
The Rockefeller Institute of Government and CBC hosted "Switching Gears: A New Way to Fund Transportation," a presentation and expert panel discussion on the vehicle-miles travel (VMT) fee. The event featured a presentation by CBC Senior Research Associate Patrick Orecki, which accompanied a CBC report released the same day, followed by a discussion…
New York should implement a vehicle-miles traveled (VMT) fee to replace declining fuel tax revenues and address the $2.1 billion in deferred infrastructure maintenance. This policy would charge motorists based on actual road usage, ensuring a sustainable funding source for transportation while allowing for variable rates based on vehicle type and location.
Recommendations related to Tax Policy
New York should phase in implementation to allow the public sector to build expertise in a new area of revenue generation.
The state should require commercial fleets to transition to a VMT fee, as these heavier vehicles impose high costs on highways and can easily evade fuel taxes.
New York should create a volunteer program for passenger vehicles to provide added insights into the implementation of a VMT for personal vehicles.
The state should provide a multiyear transition to allow ample time to establish the soft and hard infrastructure necessary to implement a near-universal program.
New York should maintain flexibility to accommodate new technology by remaining technologically agnostic and not committing to a single, proprietary platform.
The state should establish rates that vary by type of vehicle and location to account for the negative effects of air pollution and traffic congestion.
New York should execute a clear and transparent rate-setting process so that motorists know how, when, and at what rate a VMT fee is being imposed.
The state should use the VMT fee as an addition to existing sources to help remedy the mismatch between available highway and transit revenues and needed annual expenditures.
Key Data
$5.7 billion
— Annual investment required for the State to achieve a state of good repair on its assets.
$2.1 billion
— Amount of necessary repair work that is currently deferred.
51 percent
— Reduction in the inflation-adjusted per-mile direct cost to motorists who travel on State roadways since 1993.
$1 billion
— Estimated annual revenue yield from an average per-mile fee of 1 cent.
25 percent
— Reduction in OBU costs from vendors prepared to supply motorists in the Netherlands over two years.
20 percent
— Increase in social benefits—largely reduced traffic congestion, emissions, and vehicle collisions—from a VMT fee designed to decrease highway usage compared to increased fuel taxes.
New York City faces potential cumulative tax revenue shortfalls of $15 billion to $20 billion during a recession, which has historically forced the city to cut services and raise taxes. Establishing a Rainy Day Fund would allow the city to set aside resources during periods of growth to avoid these harmful fiscal measures.
Recommendations related to Tax Policy
The City and State should authorize the City to use a Rainy Day Fund by codifying its parameters and amending State law and the City Charter to permit it.
Legislation to establish the Rainy Day Fund should specify the target size, required deposits, and permitted withdrawals.
The target size of the Rainy Day Fund should be 17.2 percent of the pre-recession year tax revenue.
Minimum required deposits should deposit at least 75 percent of the annual tax revenue growth in excess of 3 percent to capture more revenue in years with faster growth.
Withdrawals from the Rainy Day Fund should be permitted during an economic contraction or a severe emergency.
Key Data
$15 billion to $20 billion
— Cumulative tax revenue shortfalls over three years in a recession.
$10.8 billion
— Recommended Rainy Day Fund target size in fiscal year 2020.
$8.5 billion
— Potential Rainy Day Fund balance if the deposit requirement had been in place during the current nine-year expansion.
17.2 percent
— Target size of the Rainy Day Fund relative to pre-recession year tax revenue.
75 percent
— Minimum portion of annual tax revenue growth in excess of 3 percent that should be deposited.
3 percent
— Threshold of annual tax revenue growth above which deposits should be made.
Spectrum News NY1 NY1 looked at education, congestion pricing and criminal justice and taxes and the proposal for five year extension of the millionaire's tax, CBC President Andrew Rein joined to help unpack the proposed budget.
The proposed pied-à-terre tax on high-value homes owned by nonresidents is problematic because it relies on piecemeal policy rather than comprehensive property tax reform and could negatively impact the luxury housing market. Instead of dedicating specific tax revenues to the MTA, the state should prioritize broader tax reforms and operational efficiencies to address financial needs while maintaining the city's economic competitiveness.
Recommendations related to Tax Policy
The property tax should be levied based on the characteristics of the property, not its ownership.
The extensive disparities in the property tax system should be addressed through comprehensive reform, not another piecemeal approach.
Revenues should not be dedicated, but rather allocated through the budget process.
Lawmakers should seriously consider lower tax rates that will do less harm to the attractiveness of NYC.
The State should not adopt a pied-à-terre tax without thoughtful deliberation about whether it is needed and revision of the proposal to mitigate the negative impacts.
Key Data
$5 million
— Threshold for nonresident-owned homes subject to the proposed annual property tax surcharge.
0.5 percent
— Starting annual property tax surcharge rate for homes worth more than $5 million.
4.0 percent
— Top annual property tax surcharge rate for the value of homes greater than $25 million.
$650 million
— Projected annual revenue yield from the proposed pied-à-terre tax.
New York City's property tax system creates significant inequities for homeowners because statutory caps on assessed value growth disproportionately benefit properties in rapidly appreciating neighborhoods while shifting higher tax burdens to more stable areas. To address these disparities, the city's property tax commission should prioritize restructuring or eliminating these growth caps to ensure a simpler and fairer tax structure.
Recommendations related to Tax Policy
The New York City Advisory Commission on Property Tax Reform should prioritize addressing the inequities in the Class 1 property tax by restructuring or eliminating caps on assessment growth.
The New York City Advisory Commission on Property Tax Reform should recommend reforms to make the property tax simpler, fairer, and more transparent, while maintaining the level of tax revenue.
Key Data
$1.25 trillion
— Full market value of taxable properties across all tax classes in fiscal year 2019.
47 percent
— Share of total market value accounted for by Class 1 properties.
21.861 percent
— Tax rate for Class 1 properties in fiscal year 2019.
$683,000
— Median market value of a Class 1 home citywide.
0.89 percent
— Median effective tax rate (ETR) citywide for Class 1 properties.
$5,822
— Median annual property tax bill for a Class 1 homeowner citywide.
New York State should implement an Unincorporated Business Tax to help residents and businesses mitigate the impact of the federal $10,000 cap on state and local tax deductions. This proposed tax structure includes specific recommendations regarding entity eligibility, optional participation, and tax credit rates to ensure the policy effectively provides relief without increasing overall state revenue.
Recommendations related to Tax Policy
Expanding the proposed UBT to include S-corporations and sole proprietors would provide New Yorkers greater relief from the SALT cap.
Making the UBT optional by an election at the entity level would reduce risk to the taxpayer by providing choice.
Preserving the proposed 5 percent rate would provide significant benefit, substantially more than half of the SALT cap impact for the applicable income.
Preserving the proposed 93 percent personal income tax credit combined with the 5 percent rate will provide significant benefit.
Expressly reflecting in law that the UBT is not added back for taxable State income purposes would clarify the tax treatment for individual partners or members.
Making the UBT credit non-refundable would reduce the risk of a legal challenge to the tax.
Modifying statutory language to strengthen the case for deductibility may add substantive strength to the tax’s underlying logic.
Working with other states to align tax provisions would maximize the UBT’s benefits and minimize cases in which multiple states tax the same income.
Key Data
$10,000
— The federal cap on a taxpayer’s deduction of state and local taxes (SALT cap).
$500,000
— The suggested State taxable net income threshold for exempting lower net income unincorporated businesses.
5%
— The proposed rate for the Unincorporated Business Tax.
93%
— The proposed personal income tax credit rate to be combined with the UBT rate.
New York State is considering numerous legislative proposals aimed at economic development, including various tax incentives, credits, and loan programs for small businesses, manufacturers, and startups. These initiatives range from expanding existing programs like the Excelsior Linked Deposit Program to creating new targeted tax credits for job creation and industry-specific renovations.
Key Data
$440 Million
— Total funding increase for the Excelsior Linked Deposit Program.
$200 Million
— Funding dedicated to the Excelsior Linked Deposit Program for business startups.
$140 Million
— Fiscal impact of extending the zero-percent Corporate Franchise Tax rate to qualified pass-through manufacturers.
$65 Million
— Increase in funding for the Excelsior Linked Deposit Program.
$20 Million
— Funding for the HIRE NY act to provide loans for microbusiness hiring.
$10 Million
— Annual grants authorized for the GrowNY pilot program.
New York needs to adjust its tax code in response to the federal Tax Cuts and Jobs Act to prevent an unplanned $1 billion tax increase on residents. State leaders should implement specific measures, such as decoupling state tax definitions from federal ones and creating new business tax structures, to maintain economic competitiveness and protect taxpayers.
Recommendations related to Tax Policy
Create charitable public education and health funds for the State and authorize localities to do the same, provided that a mechanism is included to ensure those funds are treated in a transparent and accountable manner.
Decouple the personal exemption, enhanced child tax credit, and the state and local tax deduction cap from the federal definitions to mitigate $740 million of the $1 billion unplanned tax increase.
Adopt the Governor's proposed technical business tax change clarifying that corporations may not reflect partial federal deduction on foreign income deemed repatriated on State tax returns.
Adopt an optional Employer Compensation Expense Tax (ECET) covering wages of high-salary employees; consider covering wages in excess of $200,000 and phasing up to a 6.65 percent rate.
Adopt an Unincorporated Business Tax (UBT) to preserve deductibility for pass-through entities; before finalizing, share proposal for public review and comment.
Identify and adopt reforms for 2019 that allow continued conformity to the federal definitions for the standard deduction, miscellaneous deductions, medical expense deduction, and alimony changes that eliminate the unplanned tax increases.
Consider broader reforms to improve competitiveness and streamline the tax system.
Key Data
$740 million
— Amount of the $1 billion unplanned tax increase that could be mitigated by decoupling state tax definitions from federal ones.
$1 billion
— Total amount of the unplanned tax increase resulting from the federal Tax Cuts and Jobs Act.
$200,000
— Wage threshold for high-salary employees under the proposed optional Employer Compensation Expense Tax.
6.65 percent
— Proposed phase-up rate for the optional Employer Compensation Expense Tax.
The Tax Cuts and Jobs Act creates significant challenges for New York by capping state and local tax deductions, which threatens to reduce the state's competitiveness and drive residents and businesses away. Furthermore, the federal legislation could inadvertently trigger $1 billion in unplanned state personal income tax and $109 million in state business tax increases.
Key Data
$1 billion
— unplanned State personal income tax increases resulting from the Tax Cuts and Jobs Act
$109 million
— State business tax increases resulting from the Tax Cuts and Jobs Act
$9.5 billion is CBC’s estimate of the extra taxes New Yorkers will pay due to the cap on the state and local tax deduction, known as the SALT cap, enacted in the Tax Cuts and Jobs Act of 2017. Andrew Rein, director of CBC's Special Committee on Federal Tax Changes,…
The federal Tax Cuts and Jobs Act creates significant tax burdens for New York residents and businesses, necessitating strategic state-level policy adjustments to maintain economic competitiveness. Proposed solutions include selectively decoupling from federal tax definitions, implementing an optional Employer Compensation Expense Tax, and reforming the estate tax to prevent the migration of high-income earners.
Recommendations related to Tax Policy
The State should selectively decouple from federal definitions while continuing to conform to others for at least one year to allow for evaluation and additional reform.
New York should create an optional Employer Compensation Expense Tax to blunt the impact of the SALT cap and maintain competitiveness.
The State and localities should create charitable education and health funds to which taxpayers can make federal and State-deductible contributions and receive partial State and local income and property tax credits.
New York should create a business tax on pass-through entities, such as an Unincorporated Business Tax, to complement the Employer Compensation Expense Tax.
The State should limit action on business taxes to the proposed technical fix regarding deemed-repatriated income.
Policymakers should consider reforming the estate tax to address New York’s attractiveness to high-income households.
The State and City should control spending to reduce the need for high State and local taxes.
Policymakers should consider broader reforms to simplify the tax system, such as broadening bases and lowering rates.
The State and the City must monitor the effects of the Tax Cuts and Jobs Act and adjust policy as needed to promote competitiveness, fairness, and good fiscal policy.
Key Data
$9.5 billion and $15.3 billion
— Estimated cost to New Yorkers in additional federal taxes due to the SALT cap.
$1 billion
— Projected unplanned increase in New Yorkers' State personal income tax liability due to tax conformity.
$320 million
— Projected unplanned increase in New Yorkers' City tax liability due to tax conformity.
$740 million
— Amount of unplanned tax increases that would be relieved by selectively decoupling from the personal exemption, enhanced child tax credit, and the SALT cap.
$21.0 billion
— Amount paid by New York State taxpayers earning more than $500,000 annually, representing 49 percent of State personal income taxes.
$109 million
— Expected direct impact on New York’s businesses due to conforming to federal business tax definitions.
New York State's fiscal plan includes controversial tax proposals, such as a three-year deferral of business tax credits and a new tax on for-profit health insurance companies, which could ultimately raise consumer costs. To improve fiscal efficiency, the state should instead consider repealing the poorly targeted School Tax Relief (STAR) program, which would save $3.4 billion annually, and ensure online retailers are taxed equally to brick-and-mortar businesses.
Recommendations related to Tax Policy
The State should either repeal the business tax credits if they are unnecessary or pay them as scheduled rather than implementing a three-year deferral of business tax credits.
The State should reject the proposal to increase taxes on for-profit health insurance companies to avoid increasing consumer insurance costs.
The State should repeal the School Tax Relief (STAR) program entirely because it is a poorly designed program that drives excessive benefits to wealthy taxpayers.
The State should ensure that online sales are subject to the same taxes as brick and mortar retailers, regardless of how those sales are arranged.
Key Data
$2 million
— The threshold for taxpayers claiming aggregate business tax credits subject to the proposed three-year deferral.
$3.4 billion
— The annual savings that would be realized if the School Tax Relief (STAR) program were repealed entirely.
$1.2 billion
— The annual cost of the property tax rebate associated with the School Tax Relief (STAR) program.
$750 million
— The revenues included in the Fiscal Year 2019 Financial Plan attributable to the conversion of nonprofit health insurance companies to for-profit status.
New York State Budget Director Robert Mujica reviewed the New York State Executive Budget for Fiscal Year 2019, as well as the Governor's proposals to respond to recently enacted federal tax law changes.
New York faces a potential $1 billion net state tax increase due to federal tax law changes, prompting proposals to adjust state tax definitions and deductions. These measures aim to mitigate negative impacts on residents while requiring careful oversight and refinement to ensure long-term fiscal stability and transparency.
Recommendations related to Tax Policy
New York should take quick action on immediate threats while ensuring that appropriate analysis and deliberation continue on more complex issues that pose challenges over the longer term.
An alternative to consider is to uncouple from specific federal changes that would have the most undesired effects, such as the personal exemptions and child tax credits, and allow conformity with others.
The proposed legislation must assure the funds are governed by the same transparency, accountability, and legislative oversight requirements as apply to other governmental spending.
Caution is needed to ensure this is the right version of the right solution to address the problems without adverse countervailing implications.
Since the proposal would not go into effect until 2019, it is appropriate to continue refining it beyond and outside the budget adoption process.
Key Data
$1 billion
— The amount of the unplanned net state tax increase on New Yorkers resulting from the federal tax cut package without state-level action.
New York taxpayers could lose as much as $14.3 billion in federal tax deductions because of the capping of the state and local tax deduction in the new federal tax law. NYS Budget Director Robert Mujica and NYC First Deputy Mayor Dean Fuleihan discuss the potential impact and possible responses…
The federal tax overhaul passed last month may have enormous impacts in New York and could upend the relationship between the federal government and the states. CBC and the CUNY Graduate School of Journalism gathered experts to assess the impact and potential city and state responses in a special half-day…
New York City's fiscal monitors have released optimistic budget assessments, though these projections face significant uncertainty due to potential shifts in federal tax policy and state fiscal factors. While monitors note weakness in business income, real estate transfer, and sales tax revenues, the Independent Budget Office projects $800 million to $1.3 billion more in tax revenue than the Office of Management and Budget, highlighting the volatility in these forecasts.
Key Data
$800 million to $1.3 billion
— The Independent Budget Office's projected increase in tax revenue over the financial plan compared to the Office of Management and Budget.
more than $700 million
— Revenue from new taxi medallions considered at risk over the financial plan period by the State and City Comptrollers.
exceeding $500 million
— The State Comptroller's annual revenue risk estimate for fiscal years 2019 through 2021.
The passage of the federal 'Tax Cuts and Jobs Act' has prompted the formation of a special committee to analyze its potential effects on the economy, property values, and tax revenues of New York City and State. This group aims to identify the legislation's most significant impacts and develop strategies to mitigate potential harm to the region and its residents.
Tax Increment Financing (TIF) allows municipalities to fund infrastructure projects by capturing future property tax revenue, but it carries significant risks if projects fail to generate net new economic growth or if revenue projections are overly optimistic. To protect taxpayers, governments should rigorously evaluate whether proposed projects truly require public incentives, ensure they generate sufficient revenue to cover debt, and maintain transparency throughout the process.
Recommendations related to Tax Policy
Governments should determine if the project passes the 'but for' test to ensure development would not occur without the TIF-funded capital project.
Policymakers must assess whether the investment will generate new economic activity or simply shift it from elsewhere.
Officials should evaluate if the project's expected return on investment is strong enough to justify diverting revenue from other uses.
Governments should test revenue projections against a range of economic scenarios to ensure the district will generate sufficient revenue to repay debt service and other costs.
Policymakers should consider whether general obligation bonds are a better option than TIF bonds, which are riskier and more costly.
Governments should implement strong transparency provisions to help protect future taxpayers against the risks associated with TIF projects.
Key Data
$3 billion
— The projected cost of the Hudson Yards project, which public investments and actions were expected to finance.
$359 million
— The amount New York City paid from its general fund to subsidize Hudson Yards’ interest payments after the Great Recession.
$266 million
— The amount in capital cost overruns incurred by the Hudson Yards project.
$10 million
— The amount that a majority of Chicago's TIF districts raised and spent over a 13-year period, which failed to generate significant property appreciation.
$14 million
— The amount of TIF debt the Troy Downtown Development Authority in Michigan defaulted on.
$75.4 million
— The total outstanding Pilot Increment Financing (PIF) debt in New York as of June 2017.
$67 billion is the amount of state and local taxes New York State residents deduct from their federal tax returns each year. Known as SALT, this deduction is the topic of intense debate in Washington. Congressional leadership proposes to eliminate or cap SALT in order to offset the cost of…
Business Improvement Districts (BIDs) function as self-taxing entities that levy special assessment fees on property owners to fund supplemental services, with total assessment revenues exceeding $100 million in fiscal year 2016. Because these fees act as a property tax, there is a need for more rigorous, transparent performance evaluations and public oversight during the contract renewal process to ensure these districts operate efficiently and in the interest of their stakeholders.
Recommendations related to Tax Policy
The current contract should be revised to specify that BID contract renewal is conditioned upon a thorough performance review and analysis of progress in implementing the BID's strategic plan and should include specific evaluation criteria and performance metrics to be utilized by SBS.
The contract should also require BIDs to survey their members at least once every five years to determine satisfaction with the BID's strategic plan and performance.
The additional performance measurement data, combined with the data SBS already collects, should be included in the annual BID Report for every BID for which a contract is renewed in that year.
SBS should also disclose any written notices of violations it has issued to BIDs, as well as the actions taken by BIDs to correct these concerns.
The City Council should hold oversight hearings at least once each year to review the SBS's oversight of BIDs with contracts up for renewal.
Key Data
$100 million
— Total BID assessment revenues in fiscal year 2016.
$134 million
— Total revenue collected by BIDs from all sources in fiscal year 2016.
$106 million
— Revenue from the special assessment fee in fiscal year 2016.
$838
— Median BID assessment fee.
$6,000
— Average BID charge.
74
— Number of BIDs throughout the five boroughs as of August 2017.
The Mario M. Cuomo Bridge requires a toll increase to cover its $2.9 billion in long-term debt, as the current systemwide toll freeze prevents the necessary revenue collection to service these costs. Increasing tolls specifically on the bridge, rather than across the entire Thruway system, represents the most equitable method to fund the project's construction and maintenance.
Recommendations related to Tax Policy
The Thruway Authority should increase tolls on the Cuomo Bridge alone to cover the bridge's debt and maintenance costs, as this is the most equitable funding approach.
The Thruway Authority should reconsider the announced systemwide toll freeze and instead increase tolls by the rate necessary to service the debt when the costs are payable.
There should be transparency and public discussion regarding the toll increase now that the bridge is open for use.
The Thruway Authority should effectuate a toll increase that covers all of the increased debt service costs when the asset begins serving users.
Key Data
$2.9 billion
— The amount in loans and bonds that will need to be repaid in the long term for the new bridge.
$10.61
— The projected toll for passenger vehicles based on current debt projections.
$174 million
— The average annual debt service costs for the Cuomo Bridge's loans and bonds.
24%
— The increase on all Thruway tolls required to fund the increase in debt service, assuming no decreases in utilization.
$5
— The current toll for the Tappan Zee Bridge.
$1.19
— The amount the standard toll for the Cuomo Bridge would increase under a systemwide toll hike.
The Metropolitan Transportation Authority should shift its funding framework to rely more on motorist cross-subsidies, such as congestion pricing and mileage-based user fees, rather than increasing the tax burden on New York City residents. By reallocating unspent capital funds and pursuing internal efficiencies, the agency can stabilize operations without imposing new taxes on taxpayers who already contribute a disproportionate share of transit funding.
Recommendations related to Tax Policy
The MTA should seek additional motor vehicle use charges to cross-subsidize transit.
The MTA should increase current user charges such as tolls, motor fuel taxes, and license and registration fees.
The MTA should adopt a mileage-based user fee, also known as a vehicle-miles traveled tax, which would better reflect the actual use of roads and bridges.
The MTA and its workforce should more aggressively pursue efficiencies at the agency to make the stabilization plan self-sustaining.
The MTA should implement congestion pricing as a source of funding for long-term needs.
Key Data
$3.4 billion
— The amount of regional taxes paid by New York City residents and firms in 2016 out of $4.6 billion total.
$538 million
— The amount of statewide taxes paid by New York City residents and firms in 2016 out of $1.1 billion total.
$18 billion
— The amount of authorized capital funds from the 2000 to 2014 period that remains unspent.
$9.2 billion
— The amount of authorized capital funds from the 2000 to 2014 period that remains uncommitted to construction projects.
$835 million
— The amount the City contributed in operating subsidies for the MTA in 2016.
Vice President Maria Doulis discusses issues such as New York State and local tax deductions, New York City’s $85 billion fiscal plan for 2018, and the inequity of New York City’s real estate property tax system. Original video can be found here .
New York City's property tax system is riddled with inequities, including significant disparities in effective tax rates between different property classes and neighborhoods caused by assessment caps and phase-ins. To address these issues while raising necessary revenue, the city should consider reforms such as revaluing properties, consolidating homeowner categories, or eliminating assessment caps that currently favor certain property types over others.
Recommendations related to Tax Policy
The city should provide special exemptions or property tax 'circuit breakers' to elderly or low-income homeowners to protect them from sharp tax increases.
The city should value condos and co-ops based on market values using sales prices to eliminate the severe undervaluation caused by current methodologies.
The city should assess co-ops and condos at the same 6 percent assessment ratio as 1-3 family homes to eliminate disparities among homeowners.
The city should eliminate the caps for Class 1 properties to ensure all homeowners face the same effective tax rate.
The city should eliminate the caps and phase-in provisions for all properties to address inequities among appreciating and depreciating properties.
Key Data
$21.1 billion
— Estimated baseline property tax levy in fiscal year 2015.
$4.5 billion
— Estimated revenue foregone in fiscal year 2015 due to the cap and phase-in rules.
1.21 percent
— Assessment ratio for a home in Park Slope/Carroll Gardens in fiscal year 2013.
45 percent
— Assessment ratio for a commercial property in East New York/Starrett City in fiscal year 2013.
0.78 percent
— Effective tax rate for Class 2 condos and co-ops based on Department of Finance determinations of market value.
4.60 percent
— Effective tax rate for large Class 2 rental buildings.
New York's tax policy should be re-evaluated to address inefficiencies, such as the poorly targeted School Tax Relief program and the film tax credit that costs taxpayers $420 million annually. Additionally, the state should reconsider the extension of the millionaires' tax and pause new economic development tax credits until existing programs demonstrate better transparency and results.
Recommendations related to Tax Policy
While STAR should be repealed, freezing the benefit will stem the growth of this poorly targeted program and is a step in the right direction.
Before extending the current rate of the Millionaires' Tax, serious consideration should be given to the financial feasibility of imposing a top rate below 8.82%.
Many other states have repealed or substantially decreased their film tax credits, and it is time for New York to do the same.
The proposal to create a new Life Sciences Tax Credit should be rejected, and a moratorium on new economic development programs imposed until more transparency and results are achieved in the existing programs.
Key Data
$420 million
— Annual cost to state taxpayers for the Empire State Film Tax Credit.
6
— Number of states outside of New York City that impose personal income tax rates higher than New York State.
8.82%
— The current top personal income tax rate for taxpayers with incomes in excess of $1 million.
On February 22, 2017, New York State Budget Director Robert Mujica presented highlights from the New York State Executive Budget for Fiscal Year 2018 to the Citizens Budget Commission.
New York City's Access-A-Ride paratransit program is the most expensive in the nation, with costs driven by high utilization and a high unit cost that relies heavily on an internal MTA cross-subsidy. To improve the program's financial outlook, the MTA should implement strategies to lower the cost per trip, better manage demand, and shift revenue sources, such as seeking Medicaid reimbursement for eligible trips.
Recommendations related to Tax Policy
The MTA could shift trips to its broker car service (BCS) program, which uses a for-hire vehicle broker to complete trips using black cars and liveries, as moving all ambulatory customers with BCS could save the MTA up to $126 million annually.
The MTA could provide service more efficiently by offering a subsidy program that allows paratransit users the opportunity to use the City’s taxicab fleet and Transportation Network Companies (TNC) like Uber and Lyft, which if replacing all current trips originating within the taxicab “hail zone” in Manhattan could save up to $28 million annually.
The MTA should pursue Medicaid reimbursement for non-emergency medical transportation (NEMT) trips, as if 1 in 5 trips by Medicaid-eligible customers are eligible for reimbursement, the MTA could generate an additional $10 million to $14 million annually.
The MTA should redesign the program to limit fraud and encourage wider use of the fixed-route system by paratransit customers, which could save $22 million annually.
The MTA should offer feeder service in a greater number of appropriate situations, as increasing this share to 5 percent could save up to $20 million annually.
Key Data
$461 million
— The cost of the Access-A-Ride program in 2015.
$71
— The cost per trip for New York's paratransit program in 2014, the highest among 29 cities with paratransit programs providing at least one-half million rides annually.
$256 million
— The amount of the internal MTA cross-subsidy used to finance the Access-A-Ride program in 2015.
$126 million
— The potential annual savings for the MTA if all ambulatory customers were moved to the broker car service (BCS) program.
$184 million
— The potential annual savings from doubling the paratransit fare.
$28 million
— The potential annual savings if the MTA replaced all current trips originating within the taxicab “hail zone” in Manhattan with a taxicab subsidy program.
The proposed fiscal year 2017 budget includes several tax-related measures that warrant rejection or modification, including the expansion of economic development tax credits and the creation of new tax credits for private school donations and Thruway tolls. Furthermore, the budget proposes shifting $600 million in sales tax revenue from New York City to the State and fails to adequately reform the $3.4 billion School Tax Relief program.
Recommendations related to Tax Policy
Convert the STAR exemption into a personal income tax (PIT) credit to stem the growth of this poorly targeted program.
Reject the Education Scholarship and Program Tax Credit (ESPTC) as it is an inappropriate and unnecessary subsidy to private and parochial schools.
Reject the Thruway Toll Tax Credit (TTTC) because it would encourage additional driving and put further stress on the Thruway’s infrastructure.
Declare a moratorium on expansions in economic development spending, including the extension of the Excelsior Jobs Tax Credits, until the benefits of existing programs can be examined.
Reject the proposal to shift $600 million in sales tax revenue from the City to the State through a complex transaction relating to the Sales Tax Asset Receivable Corporation.
Key Data
$3.4 billion
— Annual cost of the STAR program to state taxpayers.
$340 million
— Cost of the Thruway Toll Tax Credit included in the Executive Budget.
$600 million
— Sales tax revenue shifted from the City to the State over three years through the Sales Tax Asset Receivable Corporation.
$70 million
— Cap for the Education Scholarship and Program Tax Credit program.
$1 million
— Maximum amount per taxpayer provided by the Education Scholarship and Program Tax Credit.
New York City's property tax system is characterized by significant inequities, where different property classes face vastly different effective tax rates, and assessment caps and phase-ins create further disparities among similar properties. To address these issues while raising $2 billion in revenue, the report proposes options such as consolidating homeowners into a single tax category, eliminating assessment caps, and revaluing properties based on market sales.
Recommendations related to Tax Policy
The city should consolidate all homeowners into a single category to reduce the effective tax rate gap between homeowners and owners who use their property for other purposes.
Policymakers should eliminate assessment caps for Class 1 properties to ensure that tax burdens are more equitably distributed.
The city should revalue condos and co-ops based on market sales prices rather than income-producing potential to eliminate severe undervaluation.
The city should eliminate phase-in provisions for all properties to reduce intra-class inequities and improve transparency.
To protect vulnerable residents, the city should implement means-tested property tax 'circuit breakers' for elderly or low-income homeowners instead of using broad assessment caps.
Key Data
$2 billion
— The target amount of additional annual property tax revenue the proposed reform options aim to raise.
$4.5 billion
— The estimated revenue foregone in fiscal year 2015 due to existing assessment cap and phase-in rules.
0.81%
— The effective tax rate for Class 1 properties in fiscal year 2014.
4.57%
— The effective tax rate for Class 3 properties in fiscal year 2014.
80%
— The estimated citywide average undervaluation of condos and co-ops.
17.5%
— The minimum tax reduction for co-ops and condos provided by existing tax abatements.
NY1 Thanks to the surge of car services like uber, fewer and fewer people are taking yellow cabs—and it's just not cabbies who are feeling the pinch. The decline has real implications for the city's transit system, which received fifty cents for every cab ride.
The Metropolitan Transportation Authority faces a $19 billion funding gap for its five-year capital plan, necessitating a shift in how transportation is funded. To address this, policymakers should implement a combination of rational tolling and a vehicle-miles-traveled tax to ensure drivers contribute 25% of transit costs.
Recommendations related to Tax Policy
The State of New York should create a new revenue stream to support borrowing that fills the gap in the capital plan and contributes 25% of the MTA’s operating costs.
Elected leaders should implement, over a period of years, some combination of a VMT tax and more rational tolling to sustain and improve transportation facilities.
Drivers should cover 25% of MTA mass transit costs through a funding model that includes transit fares, general tax subsidies, and motor vehicle cross-subsidies.
Key Data
$32 billion
— The amount the Metropolitan Transportation Authority needs over the next five years to repair, replace, and improve its facilities.
$19 billion
— The funding gap the Metropolitan Transportation Authority faces for its capital plan.
$2.1 billion
— The total amount of new annual revenue needed from motor vehicle user fees to support borrowing and operating costs.
11%
— The current portion of Metropolitan Transportation Authority mass transit costs covered by drivers through tolls, fees, and taxes.
50 cents a gallon
— A hypothetical gas tax increase that would still yield less than a quarter of the needed funds.
one-third
— The portion of all greenhouse gases currently constituted by vehicle emissions.
Municipalities across the United States utilize diverse funding mechanisms for solid waste management, ranging from general fund allocations to enterprise funds and specific service fees. These financial structures, alongside varying residential diversion rates, illustrate the different approaches cities take to balance the costs of waste collection and disposal services.
Key Data
137.9%
— 2012 solid waste revenues as a share of expenses in Dallas.
123.1%
— 2012 solid waste revenues as a share of expenses in Los Angeles.
129.5%
— 2012 solid waste revenues as a share of expenses in Phoenix.
55%
— 2012 residential diversion rate in San Francisco.
60%
— 2013 residential diversion rate in San Jose.
New York City currently funds trash collection entirely through general tax revenue, which fails to incentivize waste reduction. Implementing a volume-based, pay-as-you-throw fee system, potentially offset by household tax credits, would encourage recycling and reduce the fiscal burden on the city.
Recommendations related to Tax Policy
The City should implement pay-as-you-throw fees to create financial incentives for residents to generate less waste and recycle more.
To prevent new fees from becoming an added tax burden, the City could issue annual household rebates or tax credits to offset the costs for residents.
The City should consider including sanitation services in government agency and public school budgets, allowing agencies to retain and reallocate savings from reducing trash below a benchmark.
The City Council should consider implementing a plastic bag fee to discourage waste generation.
Key Data
$57 million
— Estimated annual savings from implementing pay-as-you-throw fees.
$275 million
— Annual savings from redesigning municipal waste collection policies.
$26 million
— Annual savings from addressing inefficiencies in the private trash hauling system.
$220 million
— Annual savings from managed competition for all residential garbage.
$303 million
— Total annual long-term savings from proposed reforms.
The Executive Budget proposes merging corporate and bank taxes, reducing estate taxes, and accelerating the phase-out of the utility surcharge, while also introducing property tax relief measures. These property tax proposals are criticized for being shallow, poorly targeted, and administratively cumbersome, failing to address the underlying high costs of local government.
Recommendations related to Tax Policy
Merge the bank and corporate franchise taxes to adopt a single sales factor that apportions the tax by sales to eliminate tax-avoidance.
Lower the top estate tax rate to 10 percent to encourage some wealthy residents to remain in New York.
Eliminate the utility surcharge immediately for industrial customers and accelerate the phase out for all others to improve economic competitiveness.
Defer action on the property tax relief proposals until their design is improved and the surplus necessary to sustain them is actually achieved.
Further reduce the local share of Medicaid to effectively reduce local government expenses and hence, tax burdens.
Key Data
$346 million
— Estimated receipts loss from the corporate tax reduction by fiscal year 2018.
$1.4 billion
— Amount of local property tax collections that would be replaced by State tax revenue when the proposed property tax measures are fully implemented.
$1 billion
— Annual cost of the proposed Real Property Tax Freeze Credit.
$400 million
— Estimated annual cost of the proposed Renter's Credit.
$1,000
— Maximum allowable credit for the proposed Enhanced Circuit Breaker.
New York City's tax burden is significantly higher than other large U.S. cities, with personal income and commercial property taxes being particularly high. Policymakers should be cautious about further tax increases, as the city's high tax rates and the ease of intraregional migration create significant uncertainty regarding the potential for tax-induced outmigration and economic competitiveness.
Recommendations related to Tax Policy
Policymakers considering raising the personal income tax or the commercial property tax need to be aware that both taxes are already significantly higher than in other large cities.
Policymakers would be well advised to examine options where New York City is not as far out of line with other cities.
The policy implication is that these conditions should be considered in any initiatives to raise more revenue from the property tax.
Key Data
46%
— New York City's state and local taxes were 46% higher than the average for other large cities.
47%
— In 2012, the commercial property tax rate was 47% higher than the average of the other 14 largest cities in the nation.
$327,000
— The annual difference in commercial property tax for a $25 million property in New York City compared to the average of the other 14 largest cities is $327,000.
25%
— The 1.3 percentage point increase in taxes as a share of gross city product from 2002 represents a 25% increase in the level of taxation.
50%
— In a typical year, New York City's commercial property tax is 50% or more above the average for large cities.
162%
— The commercial property tax in New York City was 162% higher than in Hoboken for a property worth $25 million.
New York City's economic development programs, particularly tax expenditures, have grown significantly, with annual tax expenditures more than doubling to nearly $1.6 billion by 2012. These programs often lack rigorous evaluation and clear standards, necessitating reforms to ensure that tax benefits are cost-effective and truly induce new economic activity rather than subsidizing projects that would have occurred anyway.
Recommendations related to Tax Policy
A new package of reforms should be designed and advocated for in the legislature, including greater restrictions on retail benefits, shorter duration of benefits, limits on growth in benefits due to appreciation, and tighter geographic limits on project location.
The next mayor should ask EDC or an independent commission to assess these programs [insurance industry and sales tax on airline fuel] and suggest reforms to make them more effective.
The IDA’s 'Uniform Tax Exemption Policy' (UTEP) should be supplemented with additional guidelines for the award of these benefits.
A possible step toward more reasonable standards is to establish a cap on the level of per job subsidy.
The calculation for discretionary benefits should include all the benefits awarded to the project including those through other programs such as state tax expenditures and conduit financing.
Key Data
$1,599 Million
— Total annual tax expenditures in fiscal year 2012.
$682 Million
— Annual value of ICIP exemptions in 2012.
$365 Million
— Cost of the insurance company tax benefit in 2009.
$117 Million
— Cost of the sales tax exemption on fuel sold to airlines in 2009.
$265.3 Million
— Net value of annual real estate tax benefits in fiscal year 2012.
The State Tax Reform and Fairness Commission report proposes significant changes to New York's tax structure, including the repeal or examination of nearly $1.8 billion in sales tax exemptions and the reform of costly business tax incentives. These recommendations aim to improve economic competitiveness and transparency while addressing the effectiveness of existing tax programs.
Recommendations related to Tax Policy
The State Tax Reform and Fairness Commission identifies almost $1.8 billion in sales tax exemptions that should be repealed or examined.
The Commission suggests reforms to the largest business tax programs, specifically the Investment Tax Credit, the Film Tax Credit, and the Brownfields Tax Credit.
The Commission recommends periodic reviews of the costs and benefits of business tax incentive programs, as well as expanded transparency on which businesses benefit.
A simpler alternative to personal income tax offsets would be a lowering of the sales tax rate to increase competitiveness and induce greater in-state consumption.
The Governor should strongly consider the inclusion of many of these tax reform proposals in his budget for the coming year.
Key Data
$9 billion
— Total value of state sales tax exemptions according to the most recent Tax Expenditure report.
$3 billion
— Amount less than the State collects in sales tax revenue that sales tax exemptions add up to.
$110
— Threshold for the exemption for clothing and footwear.
$1.8 billion
— Sales tax exemptions identified by the Commission that should be repealed or examined.
$520 million
— Exemption value for capital improvements to property.
$611 million
— Exemption value for auto trade-ins.
New York should halt the expansion of economic development spending, which includes significant tax breaks, until the state can better justify these subsidies. The state should also limit sales tax breaks granted by local Industrial Development Agencies to ensure they are only applied to appropriate projects.
Recommendations related to Tax Policy
The State should halt the expansion of economic development spending, which includes $420 million for film tax breaks, until it more systematically scrutinizes and justifies its subsidies for business.
The Legislature should support the Governor’s proposal to limit state sales tax breaks granted by local Industrial Development Agencies to ensure they are restricted to the most appropriate projects.
The State should require projects to meet the standards of the Excelsior program and have Regional Council approval in order to receive any sales tax exemption.
Key Data
$420 million
— Amount allocated for film tax breaks within the proposed increase in economic development spending.
$7 billion
— Total amount spent annually in New York on economic development, which often lacks adequate controls or data to prove the investments are worthwhile.
$800 million
— Amount by which the proposed budget increases spending for economic development activities.
Rent regulation in New York City reduces annual property tax revenues by approximately $283 million because lower rents lead to lower property values. Future policy should focus on phasing out rent regulation benefits for high-income households to improve targeting and reduce these fiscal costs.
Recommendations related to Tax Policy
Benefits now available to low- and moderate-income households should not be reduced, but the poorly targeted benefits can be removed at an accelerated pace by phasing out regulation for higher-income households.
The long-term contraction in the scope of rent regulation should be accompanied by expansion of other more effective programs to promote affordable housing.
New legislation should phase out benefits for all high-income households.
The City should evaluate the efficiency and effectiveness of existing affordable housing programs and other policies, such as zoning, that affect housing investment.
The City should expand their financial commitment as economic and fiscal conditions improve.
Key Data
$283 million
— The annual decrease in the City of New York’s property tax revenue attributable to rent regulation.
$1.9 billion
— The estimated annual cost to households in the unregulated rental market due to higher rents caused by rent regulation.
$2.6 billion
— The total annual rent discount associated with rent regulation under the assumption that unregulated rents would fall by 15 percent if regulation were eliminated.
$5,500
— The average annual rent reduction per housing unit provided by rent regulation based on 2008 data.
New York's tax system is relatively progressive, effectively easing the burden on low-income residents through credits, but it places a disproportionately high tax burden on middle-income families compared to other states. To improve the system's overall progressivity, the state should prioritize reducing the tax burden on households with moderate incomes.
Recommendations related to Tax Policy
New York needs to focus on lowering the tax burden on households with moderate incomes to complete the model of progressivity.
Key Data
6th
— New York's ranking for the most progressive tax system in the nation according to the ITEP index.
9.6%
— Share of income that the poorest fifth of New Yorkers pay for state and local taxes.
11.6%
— Share of income that the middle quintile of New York families pay to state and local taxes.
7.2%
— Share of income that the top 1 percent of earners in New York pay for state and local taxes.
10
— Number of the top 10 counties with the highest property taxes as a percent of home values that are located in New York.
$1,447
— Maximum State Earned Income Tax Credit (EITC) a family earning less than $42,000 can receive.
New York faces a significant fiscal challenge with a budget gap reaching nearly $14 billion, necessitating strategic spending reforms rather than excessive tax increases. The state should reduce proposed revenue measures to no more than $2 billion and eliminate mis-categorized taxes, such as assessments on insurance companies and utility tax hikes, to avoid hindering economic recovery.
Recommendations related to Tax Policy
The budget adopted by the Legislature should reduce the Governor’s proposed $5 billion in new revenue measures to no more than $2 billion.
The State should eliminate the tax increase on utilities to avoid curtailing economic activity.
The Legislature should replace the $679 million of health care savings that stem from 'assessments' (meaning taxes) on insurance companies that are passed on to consumers.
The State should avoid excessive reliance on increased taxes and fees that discourage investment and spending.
Key Data
$5 billion
— The amount of new revenue measures proposed in the Governor’s Executive Budget.
$2 billion
— The maximum amount of new revenue measures the state budget should include.
$679 million
— The amount of health care savings stemming from 'assessments' (taxes) on insurance companies that are passed on to consumers.
$1.9 billion
— The total amount of revenue increases mis-categorized as spending reductions in the Governor’s budget.
$1,864.2 million
— The total value of mis-categorized revenues in the gap closing plan.
New York's high local tax burden is largely driven by property taxes and school district spending, which current relief programs like STAR often fail to address equitably. Structural reforms, including a state takeover of Medicaid, pension system changes, and property tax caps, are necessary to reduce costs and improve the fairness of the tax system.
Recommendations related to Tax Policy
An easy – and transparent – way to improve upon the STAR rebate program is to base a household’s rebate on property taxes as a share of income.
A complete state takeover of local Medicaid expenses would ameliorate these problems.
The current unnecessarily expensive pension system should be reformed by converting to a defined contribution rather than a defined benefit system.
State law could require arbitrators to award wage increases that will not necessitate tax increases or require that any wage increase be funded in part by productivity gains.
The State might also benefit from consolidation in its property tax assessment units.
Key Data
$111 billion
— Annual amount New Yorkers pay in state and local taxes.
$61 billion
— Total amount collected in taxes by local jurisdictions in New York.
$2.2 billion
— Medicaid mandates required from counties (excluding New York City) in fiscal year 2005.
$3.7 billion
— Funding for the School Tax Relief (STAR) program in the current fiscal year.
New York State faces significant future budget gaps driven by spending growth that has historically outpaced revenue, necessitating a reevaluation of current fiscal commitments. To address these challenges, the state should consider implementing targeted savings initiatives, such as reforming ineffective economic development tax programs and restructuring school aid to better align with district needs.
Recommendations related to Tax Policy
The state should phase out school aid for the wealthiest school districts to eliminate unnecessary and ineffective aid that contributes to spending inequities.
New York should eliminate or restructure ineffective economic development programs, such as the Empire Zones program, which has failed to deliver promised results and foregoes significant tax revenue.
State leaders should apply a more stringent application of local tax levy provisions to ensure school districts raise revenues at the median tax rate, preventing them from avoiding their fair share of education funding.
The state should decrease the home value exemption for Medicaid eligibility to the lower federal standard of $500,000 to reduce unnecessary public spending.
New York should eliminate payment for Medicare Part B premium contributions for retirees to bring state practices more in line with other public and private sector employers.
Key Data
$5.4 billion
— The total amount of saving initiatives that could be enacted in 2008 and beyond to reduce future budget gaps.
$558 million
— The amount of tax revenue the Empire Zones program will forego in calendar year 2007.
$334 million
— The amount the state would have saved by removing the aid allocation for the 97 districts that would not qualify for state aid under a 'pure equalization' policy.
$13 billion
— The current annual value of tax cuts enacted in the early years of the period studied.
$200 million
— The amount of business tax reductions enacted by state leaders in the previous year.
New York's budget process remains opaque and dysfunctional, resulting in a $121 billion budget that was reviewed by legislators in less than two hours. The state faces a $5 billion budget gap due to spending growth that reached 9 percent, while the STAR program fails to provide equitable property-tax relief to those who need it most.
Recommendations related to Tax Policy
The state should restructure the STAR program to deliver property-tax relief where it's needed most.
The new school funding formula should operate only on the basis of need, rather than being distorted by political deal-making that disproportionately benefits wealthy constituencies.
The state should close the loopholes in this year's new budget-reform law to ensure sufficient time for lawmakers to review the budget before voting on it.
Key Data
$121 billion
— The total size of the state budget that legislators had less than two hours to review.
9 percent
— The rate at which this year's budget inflated spending, which is more than three times the rate of inflation.
$5 billion
— The size of the budget gap the state must close in just 18 months.
$60 billion
— The amount New York's debt load will soon exceed.
$10 billion
— The amount by which New York's debt load exceeds what is affordable under reasonable standards.
New York's high local tax burden is driven by state-mandated costs, including an expensive Medicaid program, inequitable school aid, and generous public employee pension benefits. To address these fiscal challenges, the state must reform these mandates, improve debt management, and increase budget transparency to ensure long-term financial stability.
Recommendations related to Tax Policy
Reduce State-mandated local government Medicaid costs more than authorized by the 3 percent cap on local growth enacted in 2005.
Redesign State school aid programs including STAR to better serve poorer districts and thereby lower their local school tax burden.
Redesign the State-mandated pension benefits for future state and local government workers through changes such as raising the minimum retirement ages, increasing the required employee contributions, eliminating inclusion of overtime in benefit calculations, and eliminating variable supplements for uniformed workers.
Lower Medicaid expenditures by eliminating long-term care eligibility loopholes that extend benefits to middle-class residents.
Discontinue issuance of State-funded debt to cover operating deficits.
Integrate public authorities’ proposed borrowing for capital investments with the State’s capital plan in order to prevent inefficient use of borrowing capacity.
Subject public authority borrowing to more rigorous financial review by an enhanced Public Authorities Control Board or by the Division of Budget.
Reduce the State’s future debt by lowering capital spending and/or increasing pay-as-you-go financing.
Prepare more extensive multi-year financial plans.
Require that lump-sum appropriations meet specific program criteria and be subject to sunshine provisions.
Key Data
158%
— The local government portion of the tax burden in New York as a percentage of the national average.
$7,912
— New York's average Medicaid spending per beneficiary, which is 176 percent of the national average.
$5.8 billion
— Estimated annual savings from changing Medicaid policies, including reducing non-competitive rates and rationalizing utilization.
$3.4 billion
— Annual appropriations for the School Tax Relief (STAR) program in the current fiscal year.
$105.8 billion
— Estimated total debt outstanding for the State and its authorities at the end of fiscal year 2004–05.
$4.2 billion
— Projected budget gap for the next fiscal year resulting from the budget enacted for the current year.
Small business leaders in New York City and northern New Jersey identify the overall cost of doing business as a primary concern, expressing dissatisfaction with current government taxes and regulations. Public policy initiatives regarding fees and zoning must be prioritized to mitigate costs and sustain regional employment growth.
Recommendations related to Tax Policy
Policymakers should give renewed attention to controlling costs that can be influenced through government actions, specifically regarding taxes, fees, zoning rules, and utility regulations that can adversely affect business costs.
The region must foster a favorable business culture and implement public policies that encourage enterprising individuals to start businesses to sustain employment growth.
Key Data
3.0
— Average importance rating given to government taxes and regulations by New York City small business firms.
3.2
— Average importance rating given to government taxes and regulations by northern New Jersey small business firms.
2.5
— Average satisfaction rating regarding government taxes and regulations among New York City small business firms.
2.4
— Average satisfaction rating regarding government taxes and regulations among northern New Jersey small business firms.
New York's public employee retirement benefits, including pensions and health insurance, are significantly more generous than those offered by private employers and other governments, creating a growing fiscal burden. Reforming these benefits by shifting to defined contribution plans and adjusting eligibility requirements could reduce the long-term tax burden on residents and businesses.
Recommendations related to Tax Policy
Require retirees to pay 50 percent of the premium for health insurance for themselves and their dependents.
Stop reimbursing retirees for Medicare Part B premiums.
The long-run goal of pension reform should be to convert from defined benefit to defined contribution plans.
Increase required employee contributions to the pension systems.
Raise the minimum age requirement for retirement to align with federal standards.
Base pension benefits on the more standard definition of final average salary, excluding overtime.
Define work-related disabilities more rigorously to ensure clear evidence of a work-related cause.
Eliminate the variable supplements available to some retired New York City uniformed workers.
Key Data
$4.7 billion
— Projected City pension fund contributions for fiscal year 2008.
$6.3 billion
— Combined cost of health insurance for City and State retirees in 2008.
43 percent
— Percentage of retired New York City firefighters classified as having a job-related disability.
$35.16
— Average total compensation cost per hour among public employers in 2004.
$12,000
— Annual variable supplement payment for certain retired New York City uniformed workers by 2007.
$615 million
— Required City contributions to pension funds in fiscal year 2000.
New York State maintains the highest combined state and local tax burden in the nation, with local taxes approximately 60 percent above the national average. To improve economic competitiveness and equity, the state should shift reliance toward statewide revenues and eliminate inefficient tax exemptions, such as those on clothing.
Recommendations related to Tax Policy
The Legislature should permanently repeal the sales tax exemption on clothing and eliminate the two sales-tax free weeks.
State policy should aim to increase the reliance on statewide revenues to pay for Medicaid and public schools.
The Legislature should reject the Governor's proposals for expanding the STAR-Plus and Co-STAR programs because they are poorly targeted.
The Legislature should modify the Governor's proposed changes in the sales tax to yield more revenue.
The State should raise additional funds for school aid in a way that addresses the need for maintaining New York’s competitiveness.
Key Data
25 percent
— New York has the highest combined state and local tax burden in the nation, more than 25 percent above the national average.
60 percent
— The source of this unusually high combined tax burden is high local taxes, which are about 60 percent above the national average.
$561 million
— Re-imposing the sales tax on clothing would generate gross revenues of $561 million.
$105 million
— Re-imposing the sales tax on clothing would provide $105 million more in recurring revenues than would the Governor’s proposal.
$265 million
— The combined STAR-Plus and Co-STAR initiatives would cost $265 million by fiscal year 2007-08.
New York State can generate significant revenue to fund court-ordered education initiatives by broadening the sales tax base to include remote and professional services, and by reforming corporate income tax laws to close loopholes. These measures, alongside potential rate adjustments, offer a path to increase state funding while addressing inequities in the current tax structure.
Recommendations related to Tax Policy
The State should embrace the national Streamlined Sales Tax Project to ensure that taxes on internet and remote sales can be collected in the future.
The State should broaden the base of the sales tax to include many retail services that are not subject to tax.
The State should apply the sales tax to professional services when they are sold to consumers (not businesses).
The State should reform its corporate income tax laws to capture income on which corporations are now able to avoid paying taxes.
The State should consider implementing a 'throwback' rule to capture revenues by disregarding 'nowhere' income in apportioning liability.
The State should mandate combined reporting to prevent a wide variety of tax avoidance strategies.
The State should raise the alternative minimum tax as a general measure to limit the ability of corporations to avoid taxation.
Key Data
$40 million to $590 million
— Potential annual increase in state sales tax collections from embracing the Streamlined Sales Tax Project.
$950 million
— Potential additional annual revenue from broadening the sales tax base to include retail services.
$175 million to $595 million
— Estimated annual revenue from applying the sales tax to professional services sold to consumers.
$320 million to $435 million
— Estimated annual revenue from reforming corporate income tax laws to capture avoided income.
$220 million
— Estimated additional annual corporate income tax revenue from adopting mandatory combined reporting.
$2.3 billion
— Total corporate income tax revenues paid in New York State in 2003.
New York State faces a significant fiscal crisis characterized by the highest tax burden in the nation, a massive debt load, and recurring budget gaps that are exacerbated by a lack of transparency and timely budget adoption. To address these systemic issues, the state must implement structural reforms, including balanced budget requirements, multi-year financial planning, and the creation of an independent legislative budget office.
Recommendations related to Tax Policy
Require that the adopted budget be balanced in accord with generally accepted accounting principles.
Require a four-year financial plan with quarterly modifications to improve fiscal transparency.
Replace the constitutional requirement for voter approval of general obligation debt with a constitutional limit on the amount of all state debt that is set based on relevant, changing economic factors.
Create a professional, non-partisan Legislative Budget Office to provide fiscal information to both houses of the Legislature and to the public.
Require that independently prepared revenue projections be used in the adopted budget, if the Governor and Legislature do not agree on revenue projections in a timely way.
Require a “rainy day” fund larger than the current Tax Stabilization Reserve Fund.
Eliminate the use of “off-budget” accounts to ensure all state spending is subject to proper legislative appropriation and audit review.
Change the budget calendar to allow more time for deliberation on the Executive Budget by the Legislature.
Strengthen the committee process of the State Legislature to allow more participation by members in budgetary decisions.
Key Data
$141
— New York's combined state and local tax burden per $1,000 of personal income.
$26 Billion
— New York's total Medicaid expenditures in federal fiscal year 1999-00.
$38 Billion
— New York's long-term debt in fiscal year 1999-00.
$9.3 Billion
— The state's budget gap in fiscal year 2003-04.
$10,922
— Average spending per pupil in New York school districts in fiscal year 2000-01.
$771 Million
— The portion of the $1.8 billion in added pension fund contribution expenses in fiscal year 2003-04 due to legislative enhancements.
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