Budget relies on rising PIT $
Governor Cuomo’s proposed state budget for fiscal 2014 envisions a relatively strong 6.6 percent ($2.6 billion) increase in net personal income tax (PIT) receipts for the year starting April 1, even though the tax so far has under-performed the original budget projections for fiscal 2013. The highest-earning one percent of New York taxpayers is expected to generate 41 percent of net receipts, according to the Economic and Revenue Outlook volume of the budget (see p. 208).
The chart below shows the estimated and projected five-year trend in the PIT, which is by far the state’s largest tax source. For more fiscal plan details both the receipts and disbursements side, see the Empire Center’s new Explore the State Budget online app.
To do state planning using the “41%’s” who generate the revenue from personal income for this prediction does nothing more then to incentivize the process of relocating outside of NY to state’s like Fla. with no income tax as so many are now doing. Businesses are starting to look to places like the upper mid west and Texas for their tax incentives, cheaper energy and are right-to-work states (Wisconsin) The myriad of debt now in place and supposedly incorporated into the “balanced budget” does not even begin to incorporate the debt loaded health care exchanges going forward nor does it reflect the $15.5 billion dollar bill received from federal for medicaid over-billing. What also is not realized with such an overstated prediction of revenue from taxes that it counts on the make up of NY not changing going forward. The 59% who are not the high earners who will be left picking up the tab with much less. What we will see are are more of our children living out of state, more of us retiring out of state and by attrition, no reinvestment into population. Where will that put these predictions by 2020? Who will be left to pay for NYS enhanced entitlement program but the working poor.
Comment by Flor Alpert — February 5, 2013 @ 10:29 am
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Pingback by Prediction: Cuomo miscalculated — February 5, 2013 @ 11:28 am
If Cuomo does not embrace fracking to generate oil and gas revenues, his budget is DOA
Comment by Robert E Gabbey — February 5, 2013 @ 12:33 pm
Let’s hope that he doesn’t resort to fracking. Poisoned water is one thing that will make me leave the state.
Comment by Tom Barrett — February 6, 2013 @ 11:33 am