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

Tracking the increased outflow of NY taxpayers in 2019-20

A record high number of federal income tax filers and their dependents moved from New York to other states from 2019 to 2020, and the average incomes of Empire State out-migrants topped $100,000 for the first time, according to newly released (IRS). Read More

Fuzzy Math: The Climate Action Council’s $260 Billion Mistake

Chief among a public servant’s responsibilities to their constituents is to be truthful about the policies they are enacting—but New York’s Climate Action Council is misleading the public about the benefits of the Clim Read More

NY’s pre-Covid tax base drain confirmed in new comptroller’s report

New York was a net loser of income tax filers to other states even in the five years leading up to the pandemic disruption of 2020 Read More

Charter Law Fix is Low-Hanging Fruit for Legislature

A floor amendment to lift the charter cap that limits the number of charters granted to operate such schools in New York City was rejected by the State Senate last week. Read More

Voters Reject a Pair of Tax Cap-Breaching School Budgets

New York school districts whose budgets were defeated yesterday can hold a re-vote in June on the same proposal or a modified one Read More

NY’s pandemic-punctuated school spending topped US average by 89%

In a school year whose last quarter was severely disrupted by the Covid-19 pandemic, New York once again led all states in spending on elementary and secondary education Read More

Renewable Energy, Open Space, and Agriculture – New York Can’t Have it All

New York faces the prospect of growing land use conflicts in coming years, due to the Climate Leadership and Community Protection Act Read More

Can New York City Do Without the Greenpoint Energy Project?

National Grid is trying to expand its natural gas compression facility in Brooklyn, but New York’s Department of Environmental Conservation delayed making a decision to approve it Read More

Subscribe

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

CONTACT INFORMATION

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

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

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!