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The economic fallout of the coronavirus pandemic is starting to weigh on New York state, as tax collections fell billions of dollars short last month.
A report recently released by the state’s comptroller, Thomas DiNapoli, showed a 68.4 percent – or $7.9 billion – year-over-year decline in tax revenues in April. The state collected $3.7 billion in total monthly tax receipts.
“New York is facing economic devastation not seen since the Great Depression,” DiNapoli said in a statement. “New York and other hard-hit states need the federal government to step up and provide assistance, or the state will have to take draconian actions to balance its budget. We need Washington to set aside the partisan bickering and deliver substantial relief to New Yorkers now.”
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A large part of the revenue shortfall is attributable to the decision to postpone personal income tax collections to July 15, which accounted for $7 billion worth of April’s shortfall. Sales tax collections were also down $332 million when compared with the same period last year, as many businesses remained closed and residents stayed home.
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In addition to DiNapoli, New York Gov. Andrew Cuomo is also asking the federal government for financial assistance, saying the state needs about $61 billion or its faces 20 percent budget cuts. Those cuts would affect everything from schools to local governments and hospitals.
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In addition to asking lawmakers on Capitol Hill to allocate $500 billion to states to address budgetary shortfalls, Cuomo is hoping a provision included in Democrats’ most recent stimulus plan – repealing the cap on state and local tax deductions – will also stick. The New York governor has said the $10,000 SALT cap costs the Empire State about $29 billion per year.
New York has been far harder hit than any other state throughout the domestic outbreak. A previous report projected a budget shortfall for fiscal years 2020 and 2021 of $9.7 billion and a loss of 475,000 jobs over the course of 12 months.
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