There are no grounds for optimism in the August tax collection numbers released this morning by state Comptroller Thomas DiNapoli.

Net personal income tax receipts were down $83 million, or 4 percent, from the same month in 2008—and a full 12 percent below the August 2007 level.  This, despite a newly enacted 31 percent increase in the marginal rate for high-income taxpayers.

And despite the widely reported boost in auto sales from the federal “Cash for Clunkers” program, which ended Aug. 24, the state’s net sales and use tax receipts for August were down $98 million, or 11 percent.

Normally, August is not seen as a particularly telling month when it comes to reading the state revenue tea leaves in New York.  But, notwithstanding Ben Bernanke’s somewhat dubious declaration that the recession is coming to an end, all of the trends that produced a projected $2.1 billion deficit for New York State in the current fiscal year continue to point in the wrong direction.

September’s tax collection results, including what is usually a big quarterly payment of estimated income taxes by wealthy households, will be watched all the more closely by Albany bean-counters.  But even those numbers may not be conclusive when it comes to estimating the deficit for the current state fiscal year.  Keep in mind that the wealthiest taxpayers can avoid stiff penalties by calibrating their estimated quarterly payments to add up to either 90 percent of the tax they think they will end up owing for this year, or 100 100 percent of what they actually owed last year*  (*PS — recomputed to reflect the latest rate increase).  Of course, 2008 was a terrible year for many of these people—who thus may be able to wait until April 15, 2010, two weeks after the start of the next state fiscal year, to fully settle up on their New York income taxes for 2009.

Comptroller Thomas DiNapoli sounded the right note in his press release accompanying the August numbers.

“Tough choices on spending could have been made during the spring budget process,” DiNapoli said. “Avoiding those choices has made the state’s fiscal condition even more challenging. September’s collections are typically more indicative of economic conditions, but last month’s results clearly indicate that we are not out of the woods yet. Current cash flow projections show very little room for additional revenue shortfalls and every month that ends with a greater than anticipated shortfall only makes things worse down the road.”

The state is now falling dangerously far behind the fiscal curve.  Instead of expressing a vague hope of eventually reaching some back-room budget-balancing deal with feckless legislative leaders, Governor Paterson should be releasing a detailed plan for cutting spending right now.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

As leaves turn, NY’s post-pandemic recovery still has very far to go

Entering the second autumn since the COVID-19 outbreak of March 2020, the pace of New York State's pandemic economic recovery has been abysmal by almost any standard. New York was the national epicenter of the pandemic, and Governor Cuomo's "" business Read More

More NY job gains in August—but employment needs to rise a lot further

New York's jobs report for August looked relatively strong—but only by comparison, that is, with . On a seasonally adjusted basis, New York gained 28,000 private-sector jobs last month—a growth rate of 0.4 percent, according to . This was double th Read More

Another Hochul To-Do: Timely Financial Reporting

The state will spend a record $212 billion in the current 2022 Fiscal Year, under the budget its elected leaders adopted in April. Read More

Sales Tax Receipts Surge Statewide, Filling Local Government Coffers

Local governments across every region of the state raked in robust sales tax collections during the three months that ended on June 30th Read More

Health Research Inc. Turns Over its Payroll Records Despite Claiming To Be Exempt from FOIL

The full payroll records of more than 2,400 de facto state employees are available to the public for the first time after being released by Health Research Inc. Read More

Emergency Billions Pose Opportunity—and Risk—for NYS Schools

New York schools are to post publicly today plans for spending a huge pile of unexpected and unbudgeted cash. Read More

Remote Threat 

Remote work and a more mobile professional class will increase the speed and scope of New York's ongoing out migration. Read More

New York’s Medicaid Rolls Kept Pace with a Nationwide Surge During the Pandemic

New York's Medicaid and Child Health Plus programs added three-quarters of a million enrollees during the coronavirus pandemic, roughly matching the pace of a national surge in sign-ups. Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries:

Press Inquiries:


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!