New York state tax revenues plummet by $3.7 billion

New York state tax revenues plummet by $3.7 billion
By Carl Campanile April 19, 2019 | 8:54pm | NYPOST

Yet another study confirms it: NY has the worst economic prospects

New York state tax revenues fell by $3.7 billion, or 4.7 percent, last year — the largest collapse since the 9/11 attacks — but officials downplayed the significance.

Trying to find a bright side, state Comptroller Thomas DiNapoli said things could have been worse since a surge in collections last month staved off an even steeper drop.

“After months of concern over lower-than-expected tax collections, the state ended the fiscal year on a positive note,” he said.

“The sharp revenue declines in December and January, however, remind us to take nothing for granted. With expectations of a slowing economy and ongoing concerns regarding federal fiscal policies, a strong commitment to building robust reserves in preparation for the next economic slump is essential.”

The primarily culprit was a 6.6 percent decrease in personal income tax revenues, which came in at $48.1 billion — $3.4 billion less than the previous year.

DiNapoli spokesman Brian Butry cited sweeping changes to the federal tax code, including a new $10,000 cap on state and local taxes that could be claimed on federal returns.

Gov. Cuomo’s budget office agreed. Spokesman Freeman Klopett said many filers shifted payments to 2017 so they could claim the more generous deductions under the old federal tax code, “creating the appearance of a drop” this year.

“[They] are not reflective of the economy as a whole,” he said.

Klopott also pointed to a significant bookkeeping change that distorted the numbers — MTA payroll tax receipts moved from the state treasury to the transit agency’s coffers.

In 2017, $1.4 billion from the MTA payroll tax was added to the state’s total.

Nevertheless, the revenue drop was the largest since the 2002-2003 fiscal year, when personal income tax collections plummeted by 11.8 percent amid the economic impact of the 9/11 terrorist attacks and the 2001 recession, according to the comptroller’s office.

By comparison, business-related tax collection revenues were robust last year.

Consumption and use taxes rose to $17.4 billion, up $645 million, or 3.9 percent, from the previous year.

Business tax receipts were up $7.9 billion, an increase of 10.4 percent.

Total spending rose 4.4 percent to $170.9 billion.

The state’s fiscal year runs through March 31.