When New York State’s first-quarter tax receipts came in nearly $800 million above the 2011-12 financial plan forecast last week, I warned in this space that the anemic 1 percent year-to-year quarterly growth in personal income tax (PIT) withholding payments was “grounds for concern” about the state’s economic outlook.  On closer inspection, however, it turns out the quarterly withholding number was a bit misleading.

adding-machine-400x374-8728166According to sources in the state Department of Taxation and Finance, withholding collections back in April 2010 were inflated by some unusually large payments by a few large employers.  Sure enough, PIT withholding receipts for April 2011 were actually 8 percent lower than the previous year, pulling down the total for the entire quarter ending June 30.

That sort of thing happens from time to time, which is why tax receipts trends cannot always be taken at face value. Another bit of occasional “noise” in withholding tax numbers is the number of Fridays (i.e., paydays) in a month. An additional Friday in a given month will also artificially pump up or deflate the year-to-year number.

On a more positive note: in the month of June alone, year-to-year withholding receipts were up a healthy 4.5 percent over June 2010, which would be consistent with a solid (if not roaring) economic recovery.  (The June calendars for 2010 and 2011 line up, with the same number of Fridays in each, and there were no other anomalies reported in collections.)

Today’s “tepid” GDP estimate is another story, of course, lending credence to Comptroller Thomas DiNapoli’s warning last week that “our fiscal health is tenuous” in light of macroeconomic trends.

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

DiNapoli aims to curb NY’s borrowing binge

Comptroller Thomas DiNapoli has unveiled a new proposal for constitutionally curbing the state’s seemingly uncontrollable appetite for borrowing. Read More

At end of ’22, NY still near bottom in pandemic recovery

The more time passes since the spring 2020 Covid-19 outbreak, the more New York stands out among all states for the weakness of its post-pandemic employment recovery. As of December, seasonally adjusted private employment in New York was still nearly 2 Read More

Hochul’s agenda mostly sidesteps health care

Governor Hochul gave health care surprisingly little attention in her State of the State speech on Tuesday – a sign that taking on dysfunction in one-sixth of the state's economy ranks low on her list of priorities. Read More

In State Budgeting, Process Matters

At a panel event in Albany being hosted by the tomorrow morning, The Empire Center’s EJ McMahon and other budget experts and observers will discuss the timely topic of state budget process reform. Read More

Albany’s Underbaked, Overdue Budget Update Finally Arrives

The Hochul Administration has finally released an overdue budget report—which, on first look, shows the state's fiscal outlook virtually unchanged.  Read More

OVERDUE: Governor’s key budget update

Governor Hochul’s budget office has yet to release the statutorily required mid-year financial plan update of the state’s fiscal outlook. Read More

The Inflation Tax Paid by New York State Filers

With inflation rampaging, the seven-percent increase in key federal tax code thresholds is the biggest one-year hike since key aspects of the IRS code were indexed to inflation. Read More

State Budget Back in the Red

Historically large budgetary surpluses inherited by Governor Hochul are now just a memory with New York facing projected gaps of $13.7 Billion Read More

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!