A COVID-era exodus to low-tax states has New York state reeling financially: revenue during this fiscal year is down nearly 20%, according to a report.
New York, along with California, saw the steepest drops in tax-generated revenue this fiscal year. On the other end of the spectrum, Florida and Texas saw their coffers fill thanks to a pandemic-fueled migration.
New York’s levies declined by 19.5% while California has seen its state tax revenue fall by 24.9%, according to data revealed by Bloomberg News. Texas reported a 12.2% growth in state tax revenue while Florida saw a bump of 9.9%. That’s according to the data compiled by Urban-Brooking Tax Policy Center. Texas actually ended up with a budget surplus of $33 billion, which is a record for the state.
The disparity can be explained by NY and CA watching their tax bases shrink. Each state saw their populations fall by nearly 300,000 residents in the year ending last July, according to Census Bureau data. That translates to $92 billion in income lost between the two states. New York lost $25 billion in adjusted gross income in 2021 and $20 billion in 2020, while California reported losses of $29 billion in 2021 and $18 billion in 2020.
New York specifically is also dealing with budget deficits after federal COVID money dried up. The state budget financial plan projects budget gaps of $5.1 billion in fiscal year 2025, $8.6 billion in fiscal year 2026, and $7.2 billion in fiscal year 2027.
Even in the earliest years of a post-pandemic world, the two states who dominate the opposing coasts have been witnessing a massive series of social and economic shifts.