State revenues are up after top earners paid more in taxes
ALBANY, N.Y. (AP) — New York is seeing a surge in revenues this year following a tax increase on the state’s highest-earning people and businesses.
New York ended September with a balance of about $20 billion in the main operating fund, which is where most state revenues go.
That’s up from $15 billion in September 2020, $9 billion in September 2019 and $6.4 billion in September 2018.
Comptroller Thomas DiNapoli said Monday that strong tax collections are an “encouraging sign of economic recovery.”
He is calling for lawmakers to use surplus dollars to boost the rainy day fund and to pay for critical infrastructure projects.
DiNapoli has also said New York could ask Congress to forgive a portion of the $10 billion that the state borrowed for unemployment benefits.
Meanwhile, the Democratic-led Legislature and Democratic Gov. Kathy Hochul are facing calls from businesses to reverse tax increases.
Left-leaning advocacy groups are urging lawmakers to use surplus funds on COVID-19 relief for vulnerable groups, including undocumented workers and 800,000 New Yorkers who recently lost federal unemployment benefits.
New York’s economy is recovering better than expected — though Hochul has said she worries that more contagious variants of COVID-19 could slow down tax collections.
Hochul last month set aside 1.1 billion in additional revenue into reserve funds, including a reserve to fund labor settlements. She also set aside $650 million to reduce borrowing for capital projects.
New York City residents now face the nation’s highest state and local income tax rate: 14.776% for taxpayers with income over $25 million.
Previously, New York had a 8.82% top income tax rate.
This spring, lawmakers raised that rate to 9.65% for individual filers with income over $1,077,550 and joint filers with income over $2,155,350.
New York also launched two new tax brackets: 10.3% for taxpayers with income over $5 million and 10.9% for taxpayers with income over $25 million.
Those income tax increases expire by 2028.
Through September, New York brought in $35.8 billion in personal income taxes.
That’s up from $26.9 billion through September 2020, and and $28 billion through September 2019.
New York also raised the corporate income tax rate from 6.5% to 7.25% for corporations with more than $5 million in taxable income.
New York has collected $5.9 billion in business taxes through September, up from $5 billion through September 2020 and $4.2 billion through September 2019.