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New York sent $41 billion more in taxes to feds than residents, state got in benefits

ALBANY – The disparity between what New Yorkers send to Washington in taxes versus what the state receives in federal spending has grown sharply over the past several years, the state’s chief fiscal watchdog is warning.

New York last year got back 84 cents for every dollar sent to Washington, far below the national average that ends up with most other states, according to state Comptroller Thomas DiNapoli.

This message comes as plans kick around in Washington that could cut federal funding to New York and erase federal deductions on state and local taxes that New Yorkers pay.

“This analysis is intended to inform those discussions and help New York’s representatives advocate effectively on behalf of the state as major changes are considered in Washington,’’ DiNapoli said in an introduction to a 36-page report.

Only residents in New Jersey, North Dakota and Connecticut fared worse in 2016 than New Yorkers, on a per capita basis, when it came to the balance of payments.

In total dollars, New York ranked dead last, the DiNapoli report found. New Mexico came in with the highest positive balance of payment ranking among the states.

DiNapoli estimated that New York sent $41 billion more in federal taxes to Washington last year than residents or the state received back from Washington, from Social Security and Medicare and Medicaid payments to funding for transportation and education programs.

In 2013, DiNapoli previously estimated, New Yorkers sent $19.9 billion more to Washington than the federal government spent in New York.

There can be a host of reasons for balance of payment differences among the states. These can include an improving economy and higher wages that drove up federal tax payments by New Yorkers, higher military base spending in other states than New York, higher taxable wages in general in the Empire State, higher average ages that drive up Medicare and Medicaid spending, and the fact that federal spending on a per capita basis tends to be higher in low population states than high population states like New York.

New York State taxpayers last year contributed 8.3 percent of the $3.1 trillion the federal government collected, even though the state makes up 6.1 percent of the nation’s population.

New York came in fourth – behind Connecticut, Massachusetts and New Jersey – in per capital federal tax payments – $12,914. About half of the federal payments came via federal income tax collections.

The average return last year for all states stood at $1.18 per tax dollar sent to the federal government, compared to the 84 cents in New York, the comptroller said.

Nearly two-thirds of federal expenditures comes via direct payments either to individuals or to entities on behalf of them, such as through Medicare. In some areas of federal spending, notably Medicare, New York fared better than other states. The federal government last year spent, on a per capita basis, $2,383 in New York, 12th highest among the states,  DiNapoli said.

In the area of transportation, New York ranked 46th in per capital federal spending on highway programs. It ranked third, though, in federal spending on mass transit programs. New York also ranked high – in first place in some categories – in per capita federal spending on safety net programs, such as low-income housing and child nutrition programs.

On defense spending, DiNapoli said, Washington spent an average of $280 per capita in New York, compared with a national per state average of $854.

Gov. Andrew Cuomo later Tuesday pointed to the negative balance of payments between New York and the federal government as part of his own separate campaign against Washington over health insurance cuts that kicked in over the weekend that, he said disproportionately hit New York State.

Two provisions expired with the start of the federal fiscal year on October 1. One affects government payments to public hospitals – there are more than two dozen in New York, including Erie County – serving low-income and uninsured patients. Cuomo said the lack of action by Washington to extend that provision will cost New York hospitals $1.1 billion over the next 18 months. How individual hospitals might be affected is unclear, Cuomo said.

The other expired provision affects the Child Health Insurance Program, enacted in 1997 which today offers an array of health coverage to 9 million children, including 330,000 in New York.

Cuomo accused Congress and the Trump administration of ending funding for those programs expire because of failed efforts in Washington to repeal and replace Obamacare. “They’re cutting the funding for the health care safety net that was in place,’’ Cuomo said Tuesday afternoon.

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Cuomo kept the door open again to calling state lawmakers back for a special session this year if efforts by some in Congress to reverse the cuts are not in place before December 31. He used the health cuts – as well as one GOP plan to eliminate state and local taxes to be deducted on federal tax forms – as growing efforts for what he believes is an effort by Republicans in Washington to hurt states like New York.

“We’re not going to allow this state to be attacked grossly and unfairly,’’ Cuomo said.

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