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August 1, 2025

AUTHORS
Lynn Holland
Patrick Schumacher

Executive Summary

Each year, trillions of dollars flow between the federal government and the states, but not all states benefit equally. Some receive far more in federal spending than they pay in taxes, while others contribute substantially more than they get back. In its eighth annual analysis, the Rockefeller Institute of Government addresses the question of redistribution by analyzing the balance of payments. A term popularized by the late Senator Daniel Patrick Moynihan, the balance of payments refers to the net difference between federal revenue collected from a state and federal expenditures spent within that state. This report strives to shed light on both the source of these differences and how they have changed over time.

The Rockefeller Institute’s annual balance of payments (BOP) analysis is designed to aid policymakers as they deliberate whether there is too much redistribution of funding or too little. The consequences of budgetary decisions can have a profound impact on the economies of their states and the lives of their constituents. The report is also important for understanding how federal fiscal policy, economic cycles, and relief from emergency programs (e.g., those related to COVID-19) shape the financial relationship between states and Washington, DC. This report presents detailed preliminary estimates of revenue and spending data for federal fiscal year (FFY) 2023 and revised estimates for FFY 2022. While the analysis presented herein is national in scope, it places the focus squarely on New York.

New York has historically been one of the largest contributors to federal revenues, but prior to the COVID-19 pandemic, the state’s return on those tax dollars consistently lagged behind the magnitude of its contribution and behind other states’ returns. This pattern was disrupted by the COVID-19 pandemic in 2020 and 2021, when the disbursement of an estimated $3.4 trillion in emergency spending resulted in no net donor states for those two years for the first time in the history of this analysis. Strong revenue growth combined with a decline in spending put New York back in the red for 2022, with the state posting a negative balance of $10.3 billion. But in 2023, pandemicinduced volatility resulted in a $13.3 billion positive balance for the state. New York’s BOP rank on a dollar basis improved from 46th in 2022 to 27th in 2023.

New York’s return to a positive balance of payments in 2023—and its 19-step improvement in rank on a total dollar basis—was driven by a substantial decline in federal revenue collections, along with the state’s disproportionately large share of what remained of COVID-19 pandemic funding. Federal revenues collected from New Yorkers fell 8.4 percent between 2022 and 2023, compared to a smaller 7.3 percent drop in national collections that can be allocable to the states. Because New York possesses the fourth largest revenue base of the 50 states, this 1.1 percentage point differential translates into a very large dollar value, more than offsetting the decline in federal expenditures to the state.

In addition, New York continued to receive a disproportionately large share of funding from the remaining federal COVID-19 emergency relief programs ($1,045 per capita for New York versus $650 nationally). Although reduced from prior years, this lingering pandemic-related aid was the other decisive factor generating the state’s positive balance and improved position relative to other states. Excluding the funding related to pandemic relief, the dollar value of New York’s balance of payments would have been negative, and the state’s rank would have dropped to 47th.

Table 1 below, which presents the average balance of payments over the nine years that the Rockefeller Institute has issued this report, highlights the profound impact that the COVID-19 pandemic has had on New York’s balance of payments. In 2020 and 2021, federal spending contained an unusually large volume of pandemic recovery aid that tended to be distributed commensurate with state population. New York’s average dollar-value balance over the nine years for which the Rockefeller Institute has conducted this analysis is a positive $13,057 million, yielding a rank of 27th. Only two states—Massachusetts and New Jersey—are net donors. But when pandemic funding is excluded from the analysis, New York’s BOP falls to a negative $23,107 and a rank of 48th. These data suggest that the latter measure is likely a much better predictor of New York’s fiscal relationship with the federal government going forward.

Nine-Year Average Balance of Payments With and Without COVID-19 Spending (Dollars in Millions)