The pandemic and its fiscal aftermath have given rise — temporarily — to a state budget trend unique in New York’s history: rapid growth in revenues, spending and surplus reserves.
Even more than most states, New York experienced a severe economic and fiscal disruption following March 2020’s COVID-19 outbreak. For a time, the shock waves seemed very likely to vaporize a chunk of Albany’s tax revenues and precipitate a fiscal crisis. But Gov. Andrew Cuomo’s inflated early predictions of massive deficits quickly dissipated amid waves of federal relief aid — along with unexpectedly large increases in the state’s tax revenues.
Within two years, state spending had been inflated by tens of billions in federal aid, buttressed by surging capital-gains tax revenues generated by a strong stock-market recovery — and topped off by the proceeds of significant (and unnecessary) tax increases in Cuomo’s final budget in spring 2021, targeted at New York’s highest-earning individuals and corporations.