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Federal pandemic aid came back to New York, report finds

New York has long been considered a “donor” state, with its taxpayers contributing more to the federal government than they receive in return. However, the influx of federal pandemic aid has temporarily altered this dynamic, according to a report released Thursday by State Comptroller Tom DiNapoli’s office.

DiSanto Propane (Billboard)

The COVID-19 pandemic relief funds helped boost New York’s per capita ranking in the federal balance of payments from 49th to 30th between 2019 and 2021. For every dollar New Yorkers paid in taxes to the federal government, approximately $1.51 was returned in federal spending. Although still below the national average of $1.70 per dollar, all states experienced a “positive” balance of federal spending per tax dollar due to pandemic emergency relief funds.

The federal aid bolstered state finances during the pandemic, as business closures and public gathering restrictions led to a surge in unemployment. Funding for programs such as Medicaid and unemployment aid also increased.

As emergency orders are eased and lifted, federal aid is diminishing. DiNapoli commented, “New York’s per capita ranking jumped because of pandemic funding for fiscal recovery, economic support, Medicaid, and vaccine manufacturing contracts. This significant improvement reflects short-term measures, not enduring policy changes. As the temporary aid winds down, the underlying trends are likely to return, with New York reverting to getting far less from Washington than it sends.”

In 2021, New York’s share of federal tax payments represented 7.7% of the $3.8 trillion total, surpassing the state’s 6% share. Last year, New Yorkers contributed $14,753 per capita to the federal government, ranking third among states.

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