Between fiscal years 2002 and 2007, New York City’s tax revenues increased by 74 percent, to $37.8 billion (really, see last page).*
A new report by Washington’s Government Accountability Office (GAO) helps show why.
Over the same period, the GAO points out, debt in the U.S. economy increased by nearly 53 percent, to $31.7 trillion.
And, debt at investment banks went up, too.
The five largest broker-dealers increased their debt in relation to their capital cushions by 36 percent, before accounting for debt held off the books, which often increased the ratio even more.
As financial firms and regular people borrowed more, Wall Street earned higher profits, and New York reaped higher tax revenues.
Growth in local tax revenues and growth in borrowing reached historic levels together.
As FW pointed out here, New York has never seen such tax-revenue growth, not during the tech boom and not during the heady corporate-takeover years of the eighties.
And as Hoisington Investment Management pointed out here, the nation has never — never — seen debt levels as high as they still are.
Now, we are all “deleveraging” (borrowing less) — which should make New York wonder if tax revenues will keep growing at their credit-bubble rate. If they do not, our budget cuts have barely begun.
___
*You are probably thinking, but 2002 was a bad year for New York. However, tax revenues were still up nearly 63 percent between fiscal years 2001 and 2007. FY2001, which started in July 2000, included the last revenues from the tech-bubble peak and was New York’s record tax-collection year up ’till that time.
You may also like
How Albany Could Save Millions by Closing a Medicaid Loophole
A glitch in state insurance law is allowing doctors to collect Medicaid fees that are sometimes hundreds of times higher than the program normally pays, costing taxpayers millions of dollars a year.
Read More
After Tariff Shock, Albany Should Face its New Fiscal Reality
This year, for once, state lawmakers' failure to pass a timely budget could prove to be a stroke of luck.
When President Trump rolled out his on April 2, Albany leaders had not agreed on a spending plan for the f Read More
New York’s Home Health Workforce Jumps by Another 10 Percent
New York's home health employment is continuing to soar, growing by 57,000 jobs or 10 percent from 2023 to 2024, according to newly released data from the U.S. Bureau of Labor Statistics.
Read More
Hochul Pushes New Energy Tax Past Next Election
Governor Hochul has further delayed what amounts to a tax on energy until after the next general election.
Almost six years after the state adopted an aggressive emissions-cutting Read More
Sorting Fact from Fiction on the Future of Medicaid
As Washington contemplates cutbacks to federal funding for Medicaid, officials in Albany have reacted in two self-contradictory ways.
On one hand, they warn of Read More
The 411 On New York’s 911 Skim
New York for decades has collected, under various names, a special tax on mobile phones. The tax, which today shows up on customer bills as the “public safety communications surcharge,” devolved from being a fee to pay for 911 services to a general revenue source with 911 services as a near second thought. Since 2009, almost half the surcharges paid by customers for public safety communications—more than $1 billion—have been redirected to New York’s general fund. Read More
Immigrant Enrollment in ‘Emergency Medicaid’ Surges to 480,000
One of the biggest drivers of New York's Medicaid enrollment growth over the past decade has been "emergency Medicaid" for undocumented immigrants, newly released state records show.
Read More
Medicaid’s Missing Million
The Health Department has been either unable or unwilling to document the eligibility status of almost one million Medicaid recipients, raising further concern about the possibility of large-scale over-enrollment. Read More