(The Center Square) — Taxpayers fled New York in record numbers during the pandemic, taking billions of dollars in tax revenue with them, according to a new report by the state’s top money manager.
State Comptroller Tom DiNapoli’s analysis shows tax collections were negatively impacted by more people leaving between 2020 and 2021 than moved in. Indivdual tax filers were the largest group to leave the state, according to the report.
“In 2021, the total number of New York’s personal income tax filers declined for the first time since the Great Recession,” DiNapoli wrote in the sobering report, which was published Tuesday. “As net departures and out-migration rates remained elevated in 2021, the total number of nonresident taxpayers grew.”
DiNapoli said the report’s findings underscore the need for New York policymakers to address the issue of affordability and the state’s rising cost of living.
“Policy makers need to make sure the state remains an attractive, affordable place to work and to live,” he said in a summary of the report. “Doing so will help maintain the state’s largest revenue source to ensure vital services continue in order to provide a high quality of life for all New Yorkers.”
In 2021, the number of people moving to New York rebounded but the number of taxpayers moving out of New York still outpaced those moving in, a net out-migration of over 39,200 – more than one-third greater than the prepandemic average, according to the report.
Dinapoli’s report is the latest showing New York consistently loses more taxpayers than move into the state, a population decline that major implications for the states, revenue and tax collections.
Critics point to the state’s high cost of living, a pressing housing shortage and other issues that are prompting New Yorkers to flee to other states.
New York lost an eye-popping $24.5 billion in state-adjusted gross income in 2021 as residents fled to New Jersey, Florida and other low-tax states, according to Internal Revenue Service figures.
The state comptroller’s assessment of the pandemic’s impact on outmigration in New York comes as Gov. Kathy Hochul and Democratic legislative leaders begin the process of crafting another state budget. Democrats are renewing a push for a tax on the wealthy, which Hochul so far has opposed.
DiNapoli appears to fire a shot across the bow by suggesting that budget writers not do anything that could further increase outmigration, or reduce the amount of personal income taxes, which is the largest contributor to state revenues.
“As economic conditions change and both federal and state tax policy actions evolve, policy makers will need to monitor the movement of taxpayers to preserve the state’s largest revenue source and ensure vital services can continue to be provided,” DiNapoli wrote in a summary of the report.
Originally published by The Center Square. Republished with permission.
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