(The Center Square) — New York and its municipalities top the nation’s top taxers and highest spenders, according to a new watchdog report, which renews calls for the state's political leaders to hold the line on taxes.
The report by the Citizens Budget Commission, a nonpartisan watchdog group, found that New York state and local governments collected an average of $12,500 per capita per year—the highest in the nation—in fiscal year 2024, eclipsing second-place California by 22%. The state and municipalities also are the second-highest spenders per capita in the country, the group said.
"New York’s State and local governments spent so much more per capita than neighbors and competitors that they would have saved $99 billion if they spent like neighboring New Jersey and $143 billion had they spent like Texas," the report's authors wrote.
The report's authors suggested that the findings are a wake-up call for New York, saying the state's long-term success depends on its ability to stay competitive and attract and retain residents and businesses.
"Increasing its already-nation-leading taxes will not make New York more competitive," they wrote. "It may well do the opposite, making it less attractive to some by further driving up New York’s high cost of living and doing business."
The nonpartisan commission has long argued that New York's outmigration is driven largely by the state's highest-in-the-nation tax burden, a business sector struggling under excessive regulations and rising labor costs.
New York's population is shrinking, with hundreds of thousands of residents fleeing to Florida, New Jersey and other low-tax states, according to the latest U.S. Census figures. The population decline has major implications for the states, revenue and tax collections, federal data shows.
The state's high cost of living and "uneven" public services, coupled with the high tax burden, weaken the state's "value proposition and its ability to attract and retain residents and businesses," they said.
New York has a graduated individual income tax, with rates ranging from 4% to 10.90%. There are also cities, towns and counties that collect local income taxes.
The report suggested that the best way for New York to compete with other states for new families and businesses is to "offer better value" to its residents.
"Taxes are one part of the equation," the report's authors said. "In truth, New York will not — and does not need to — be a low- or even average-taxing and spending state, but given that it is already top of the charts, New York should hold the line on or preferably reduce taxes."
The report comes as Democratic Gov. Kathy Hochul is seeking another four-year term in the November elections amid a challenge from Republican gubernatorial nominee Bruce Blakeman, a Long Island County executive, who has made the state's high cost of living a key plank of his campaign.
Hochul has resisted calls from Democratic lawmakers to increase broad-based taxes, but earlier this year approved a plan authorizing New York City Mayor Zohran Mamdani to impose a new tax on second homes valued at more than $5 million.