N.Y. got more from Washington than it gave in taxes due to pandemic aid

For years, New York officials have sounded a familiar refrain when going hat-in-hand to Washington for help: It’s well deserved, because the state’s taxpayers send far more to the federal government than they get in return.

But that changed during the pandemic.

A surge in federal aid as the state became one of the hardest hit by the first wave of COVID-19 left New York receiving more from Washington than it paid out during the federal fiscal year that ended in September 2020, according to a report from State Comptroller Tom DiNapoli.

A server wearing a protective mask cleans a table behind a plastic barrier at Veselka restaurant in New York.

Mark Abramson/Bloomberg

For every $1 paid to the federal government, New York received $1.59, the comptroller’s office said, with New York sending in about $250 billion and getting back $396 billion.

New York wasn’t the only one to come out ahead, with all 50 states receiving more from the federal government than their residents paid in taxes that year, according to the report. And President Joe Biden’s emergency rescue plan added to the aid influx in 2021.

Yet it marked a stark — if temporary — difference for a state that has long effectively subsidized others when it comes to the balance of federal aid. In 2019, New York sent $265 billion to Washington and received roughly $242 billion in federal expenditures, the equivalent of 91 cents in federal aid for each dollar sent to Washington.

“The influx of federal relief funds was critical to helping states manage through the pandemic, but the money is temporary,” DiNapoli said in a statement.

“Federal aid helped stabilize New York’s economy, but it is finite and will not resolve the long-standing imbalance of payments among the states,” he said. “As federal pandemic spending winds down, the underlying trends we saw pre-pandemic are likely to return, with New York giving more to Washington than it gets back. As our rebuilding process continues, more must be done to achieve a more equitable distribution of federal funds to New York.”

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