Giving or Getting? New York's Balance of Payments with the Federal Government (2025)

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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)
Actual Excluding COVID-19
State Average BOP Rank Average BOP Rank
Alabama $44,529 8 $39,056 4
Alaska $7,668 35 $6,418 28
Arizona $44,494 9 $35,301 9
Arkansas $20,104 22 $16,619 21
California $35,950 14 ($29,013) 50
Colorado $8,223 33 $1,093 39
Connecticut $4,622 41 ($155) 42
Delaware $4,800 40 $3,459 33
Florida $67,173 4 $41,123 3
Georgia $43,558 11 $29,309 12
Hawaii $12,375 28 $10,301 24
Idaho $7,723 34 $5,807 30
Illinois $13,763 26 ($4,941) 46
Indiana $27,574 19 $19,782 20
Iowa $10,482 29 $6,613 27
Kansas $9,651 31 $6,351 29
Kentucky $39,600 12 $34,244 10
Louisiana $32,408 16 $25,355 16
Maine $10,424 30 $8,663 25
Maryland $71,184 3 $63,150 2
Massachusetts ($1,307) 49 ($12,075) 47
Michigan $43,580 10 $29,031 13
Minnesota $4,850 39 ($2,524) 44
Mississippi $29,234 18 $25,429 15
Missouri $37,050 13 $30,059 11
Montana $5,922 36 $4,506 31
Nebraska $3,986 42 $1,611 37
Nevada $8,437 32 $3,839 32
New Hampshire $1,191 48 ($530) 43
New Jersey ($13,008) 50 ($26,469) 49
New Mexico $26,871 20 $24,292 17
New York $13,057 27 ($23,107) 48
North Carolina $48,850 7 $37,565 5
North Dakota $2,352 46 $1,098 38
Ohio $52,127 6 $37,234 8
Oklahoma $25,970 21 $21,499 19
Oregon $15,724 24 $10,432 23
Pennsylvania $55,663 5 $37,322 7
Rhode Island $5,198 38 $3,424 34
South Carolina $33,531 15 $27,844 14
South Dakota $3,418 44 $2,176 36
Tennessee $31,949 17 $24,124 18
Texas $72,212 2 $37,341 6
Utah $3,411 45 $103 41
Vermont $3,516 43 $2,449 35
Virginia $100,890 1 $91,443 1
Washington $5,714 37 ($3,804) 45
West Virginia $18,454 23 $16,370 22
Wisconsin $14,978 25 $8,370 26
Wyoming $1,836 47 $1,002 40

SOURCE: Rockefeller Institute of Government staff estimates.

Although COVID-19 funding had its greatest impact in 2020 and 2021, the results for 2022 and 2023 indicate that the pandemic and its aftermath continued to have a substantial fiscal impact during those two years. For example, the historical data indicate that it is extremely rare for revenue collections to fall on a fiscal year basis, as it did in 2023, in the absence of either a recession or a major law change. This decline can be directly linked to the inflation and financial market volatility engendered by the long tail of the pandemic. Moreover, Treasury Department data indicate a reversal in the following year, with total federal receipts growing 10.8 percent in 2024, to which New York State taxpayers likely made a substantial contribution. As a result, we fully expect New York to post a negative balance of payments for 2024, and thus rejoin the ranks of the bottom five states by this time next year.

Key findings from this year’s report include:

  • Based on preliminary data, New York posted a positive balance of payments of $13.3 billion and a ranking of 27th for 2023; this compares with a negative balance of $10.3 billion and a rank of 46th for 2022. New York’s improved ranking for 2023 was a direct consequence of the decline in federal revenue collected from state taxpayers, in combination with the state’s large share of what remains of federal emergency COVID-19 spending.
  • Adjusting for population size, New York’s BOP improves from a negative $522 in 2022 to a positive $674 in 2023. Nevertheless, the state’s ranking on a per capita basis deteriorated by one step from 44 in 2022 to 45 in 2023. The national average per capita balance of payments for 2023 was $4,099, meaning that New York received $3,425 less than the national average on a per capita basis.
  • Across all states, allocable federal receipts decreased by 7.3 percent in 2023, while total federal allocable expenditures increased by 1.4 percent. New York experienced a larger 8.4 percent decrease in federal tax receipts and a 1.7 percent decrease in overall federal expenditures. Excluding pandemic spending, New York would have seen an even larger decrease in federal expenditures, and its BOP rank would have deteriorated from 27th to 47th for 2023.
  • While COVID-19 spending significantly boosted the dollar amount of New York’s balance of payments, when the increment is spread over the state’s large population, New York’s ranking on a per capita basis remains reliably near the bottom, where it has historically been. Indeed, excluding pandemic spending, New York’s per capita rank for 2023 remains unchanged at 45th.
  • Only three states posted a negative balance of payments for 2023. The five states with the least favorable dollar balance of payments in 2023 were New Jersey (-$18.9 billion), Massachusetts (-$6.8 billion), Washington (-$54 million), New Hampshire (+$32 million), and Wyoming (+$1.9 billion).
  • The five states with the most favorable dollar value balance of payments in 2023 were Virginia ($145.4 billion), Maryland ($81.1 billion), Texas ($80.0 billion), Pennsylvania ($62.8 billion), and Ohio ($60.0 billion).
  • For every dollar New York sent to the federal government in 2023, it received $1.04 in federal expenditures. This compares to an average of $1.32 received for every dollar contributed across the 50 states. As a state with a high concentration of income and wealth, New York continued to contribute significantly more in receipts on a per capita basis ($16,145) than the national average ($12,662)—a difference of $3,483.
  • The bottom five states on a per capita basis in 2023 were New Jersey (-$2,011), Massachusetts (-$967), Washington (-$7), New Hampshire (+$23), and California (+$342).
  • The five states with the most favorable BOPs in 2023 on a per capita basis were Virginia ($16,650), New Mexico ($16,178), Alaska ($14,760), Maryland ($13,037), and West Virginia ($12,130).
  • Although the aftermath of the pandemic has continued to impact federal spending and receipts, the results for 2022 and 2023 indicate that New York is likely to regain its historic status as a consistent donor state going forward.
  • New York’s expansive fiscal capacity is often construed as a justification for New York to be subsidizing other states, but this argument fails to appreciate the extreme diversity of economic outcomes within the state and the equally diverse needs of its population. While there are numerous indicators of need, produced by various federal agencies, New York tends to score high on all of them. That need is easily masked by the great wealth of a relative few.

Read the full report.

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