Pandemic Aid Upends States’ Balance of Payments with the Federal Government

Preliminary analysis of 2020 data indicates a positive balance of payments of $136.2 billion for New York, improving the state’s ranking from 50th in 2019 to fifth in 2020

Over five Federal fiscal years prior to FFY 2020, New York taxpayers gave $168.2 billion more to Federal government than they received back in Federal spending, the most of any state

Distribution of trillions of dollars in federal pandemic aid in FFY 2020 led to no net donor states for first time in recent memory

New York’s per capita balance of payments rank in FFY 2020 of 41 represents modest improvement from 47 in 2019

Albany, NY — The Rockefeller Institute of Government today released its fifth annual balance of payments report, which details the distribution of Federal expenditures and receipts to all 50 states for 2020.

The annual report, used by state and national policymakers, national media outlets, and the public, provides invaluable context for understanding how much states give and get from the Federal government. This year’s analysis details a year unlike any other in recent memory; as a result of Federal stimulus spending, there were no net donor states. By contrast, 2019 saw several states, including New York (-$21.7 billion), give billions of dollars more to the Federal government than they received in Federal spending in the state.

As conversations continue among national policymakers over equitable distributions of Federal expenditures, especially in light of the ongoing economy recovery from the COVID-19 pandemic, the data and findings from the balance of payments (BOP) report contextualize how Federal funds were distributed during the first pandemic year. By design, Federal programs disbursed the largest sums of relief funding to the states with the largest volume of need, which translated to the most money going to the most populous states. The implications for New York were significant: New York’s national rank on its net balance of payments improved from 50 in all prior years’ analyses to five for 2020.

“I’d like to first commend the extraordinary efforts of the report authors, Laura Schultz and Lynn Holland, to deliver this report amid dramatic changes to the data underlying the balance of payments report,” said Robert Megna, president at the Rockefeller Institute. “As noted in the New York governor’s executive budget, unless changes are made to Federal spending, the positive balance of payments shown here for New York will likely not persist once COVID-19 spending is allocated. Policymakers should keep these figures in context: New York’s nearly $140 billion positive balance of payments in 2020 is the result of a global pandemic and is still not equivalent to the more than $168 billion given by New York taxpayers to the Federal government over the five years prior.”

The Federal government responded to the pandemic-induced shock to the economy in a starkly different manner than it had responded to previous economic crises, notes the report. Congress passed in rapid succession trillions of dollars in programs incurring a Federal budget deficit of $3.1 trillion in 2020, by far the largest in history. While complete data for 2021 are not yet available, a Federal budget deficit of $2.8 trillion suggests that 2021 will likely also contain no net donor states. Other key findings from the report include:

  • California ($262.8 billion), Texas ($191.3 billion), Florida ($176.6 billion), and Virginia ($167.5 billion) round out the list of the top five states with the most favorable balances. Notably, the top five include the four most populous states in the nation.
  • New York’s per capita balance of payments, $6,744, affords the state a rank of 41, a substantial deterioration in the state’s position as compared with the state’s total dollar position, but an improvement for the state’s rank of 47 in 2019. Indeed, 2020 represents the first time that New York hasn’t ranked among the bottom five in the history of this analysis.
  • In the absence of the $1.5 trillion estimated COVID-19 emergency spending, the Rockefeller Institute estimates that New York’s net dollar BOP position would have ranked 27th, while the state’s per capita BOP position would have ranked a much less favorable 48th.

Read the full report here.

Explore the interactive Balance of Payments Dashboard.