Gov. Kathy Hochul’s proposal to send $500 checks to millions of New York households is based on a flawed premise, according to The Empire Center’s Ken Girardin. The $3 billion sales tax “surplus” she claims doesn’t exist. Sales tax receipts are expected to rise modestly this year, but slower than inflation, meaning the state’s financial windfall is illusory.
Girardin points out the increase in sales tax revenue stems largely from pandemic-driven inflation, not unexpected economic growth. Hochul’s plan to distribute the funds as inflation relief checks risks anchoring state spending on unstable, volatile tax revenues.
With state expenses climbing and reserves finite, this policy gamble could leave New York vulnerable to future economic downturns.
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