Taxpayers in Nassau and Suffolk counties are sending far more money to Albany and Washington than gets returned to Long Island in the form of government spending, according to a report released Thursday by the Long Island Regional Planning Council.
The Balance of Payments study, which was commissioned by the LIRPC and conducted by PFM Group Consulting, found that the combined deficit from federal and state spending to what Long Island contributes in taxes was more than $40 billion in 2022.
The new report found that Long Island sent about $68 billion to the federal government in the form of personal income, business, employment, estate, excise and gift taxes, while federal expenditures (excluding COVID payments) in Nassau and Suffolk were $42 billion, representing a deficit of nearly $26 billion. In addition, New York State received $24.6 billion in taxes and fees from Long Island while the region received $9.8 billion in expenditures from the state, a deficit of $14.7 billion.
“As a high wealth area, Long Island has long served as an economic engine both for New York State and the federal government,” John Cameron, LIRPC chairman, said in a written statement. “This report should sound the alarm in Albany and Washington about the need for greater investment into Nassau and Suffolk if they want and expect the region to remain economically vibrant.”
The LIRPC study, which updates a similar study performed by the Long Island Association 10 years ago, found that several changes in New York tax code since the 2013 study have had a greater impact on wealthy counties such as Nassau and Suffolk than other areas of the state, adding that while the 2017 federal tax changes lowered many rates, the $10,000 cap on state and local deductions remains detrimental for Long Island.
“The Long Island Regional Planning Council has long recognized that the unsustainable tax burden is one of the most significant challenges facing our region,” Cameron said in the statement. “We will continue to advocate for greater investment from Albany and from Washington for Long Island’s infrastructure, transportation and sewer needs, along with high tech, STEM careers and local community development.”
The report also found that revenues coming from Long Island to Albany increased by 40%, however expenditures actually decreased by 10% as compared with 2013 and the $6.6 billion gap between revenues and state expenditures in 2013 more than doubled in 2022 to $14.7 billion. State expenditures include payments to vendors, Medicaid, wages of state employees, unemployment benefits and STAR rebates.
In addition, revenues from Long Island to the federal government increased by 29% compared to 2013 while federal expenditures (excluding COVID relief) increased by 75%, according to the report. Federal expenditures include direct payments to individuals, such as Social Security, unemployment, federal pensions, grants (including Medicaid and SNAP), contracts and purchasing and wages of federal employees.
The entire report can be found on the commission’s website at: lirpc.org/wp-content/uploads/2023/12/LIRPC-Balance-of-Payments-Report-12.5.23.pdf
David Winzelberg
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