State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 87

New York’s Balance of Payments
in the Federal Budget
Federal Fiscal Year 2016

Deficit

Surplus of $0 to $2,000

Surplus of $2,001 to $4,000

Surplus of $4,001 or more

OFFICE OF THE NEW YORK STATE COMPTROLLER

Thomas P. DiNapoli, State Comptroller
OCTOBER 2017

Executive Summary
The budget of the United States government plays a
considerable role in the finances of New York State
and its local governments, as well as in the daily lives
of New Yorkers. Federal spending provides Social
Security income, Medicare and Medicaid health
coverage and other benefits for millions of State
residents. In recent years, federal aid has represented
roughly one in three dollars of All Funds receipts
in the State Budget. Spending from Washington
also supports tens of thousands of New York jobs.
Meanwhile, the Empire State generated almost
$255 billion in federal tax revenues in Federal Fiscal
Year (FFY) 2016.
The fiscal relationships between Washington and
the 50 states vary widely, both overall and within
particular budgetary areas. This report examines
the flow of funds between the federal government
and those states for the Federal Fiscal Year ending
September 30, 2016, with special attention to its
impact on New York State. The analysis is based on
data from federal budget documents, the Internal
Revenue Service and other sources.
Based on federal receipts and outlays analyzed for
this report, in FFY 2016, New York State generated
nearly $40.9 billion more in taxes paid to the federal
government than it received in return through federal
spending. New York contributed $12,914 per capita
in tax revenue to the federal budget, over a third
more than the national average. The State received
an estimated $10,844 in per capita federal spending,
slightly below the nationwide average.
In other words, for every dollar New York generated
in federal tax receipts, it received 84 cents back in
federal spending—compared to a national average
of $1.18. In its overall balance of payments—the
difference between taxes paid and federal spending
received—New York ranked 47th among the states,
with a per capita deficit of $2,070. The gap between
taxes paid and spending received in New York has
doubled over the course of three years, largely
because federal income tax collections from the State
increased. In FFY 2013, New York generated $19.9
billion more in federal taxes than it received back in
federal spending, according to a 2015 analysis by the

Office of the State Comptroller; in FFY 2016,
the negative balance had grown to an estimated
$40.9 billion.
The largest of the broad spending categories in
the federal budget represents direct payments to
or for individuals for a variety of programs such as
Social Security, Medicare, benefits for veterans and
for retired federal employees, and food assistance.
Spending for such direct payments totaled $2.26
trillion nationwide in FFY 2016. New York received
an estimated $136 billion in this category, with a
per capita average that was close to the national
figure. Major programs for which the State received
higher-than-average per capita expenditures include
Medicare, Social Security (including Social Security
disability), food assistance and Supplemental Security
Income. Payments from Washington for federal
employee retirement benefits and veterans benefits
in New York were lower than average on a per
capita basis.
In the second largest spending category in the federal
budget, grants to state and local governments, New
York received nearly $61.3 billion and fared better than
46 states on a per capita basis. Medicaid makes up
more than half of all federal spending for such grants,
and New York’s per capita Medicaid funding from
Washington ranked third among the states.
In two other major categories—procurement and
federal employee compensation—federal spending in
New York was less than half of the national average
on a per capita basis. The State’s combined total in
these two areas, $16.7 billion, was 2.4 percent of the
nationwide total.
Overall, New York State received 5.9 percent of total
federal spending examined for this analysis. The State
generated 8.3 percent of total federal tax revenue
examined for this report, which was higher than its
shares of the U.S. population (6.1 percent) and of
the nation’s personal income (7.5 percent). On a per
capita basis, federal tax revenues from New York
State were more than a third higher than the national
average, partly because of relatively higher incomes in
the State.

New York’s Balance of Payments in the Federal Budget: FFY 2016

3

The federal budget deficit in FFY 2016, $585 billion,
represented current spending that was funded by
borrowing. As a result, federal spending in the states
was greater than federal revenue raised—the states,
in the aggregate, received more than they paid for.
Federal budget deficits (or surpluses) change over
time, depending on many factors including shifts in
the economy and policy actions that affect levels
of spending and revenues. How such changes may
affect New York and other states going forward is
difficult to predict.
Federal spending and the burden of federal taxes are
not apportioned to the states by any single formula.
Rather, dozens of statutory provisions as well as a
wide range of economic, demographic and political
factors drive the state-by-state distribution of such
costs and benefits. Examples of such factors include:
each state’s population; its numbers of residents in
poverty or those eligible for Social Security, Medicare
and Medicaid; income levels; and the states’ own
policy choices.

4

The President has recommended broad changes
to federal spending, including major reductions
in coming years to Medicaid and other domestic
programs as well as significant increases in
Defense Department funding. At the same time,
the Administration and Congress are considering
sweeping revisions to the federal tax code.
Such changes could have significant impacts on
federal expenditures that benefit New Yorkers, on
the taxes generated in the State, and on the balance
of federal budgetary impacts among the 50 states.
This report is intended to help New Yorkers better
understand how federal budget policies affect the
State, and to inform and promote their participation in
the national fiscal debate going forward.

New York’s Balance of Payments in the Federal Budget: FFY 2016

Introduction
This report examines the flow of funds between the
federal government and the 50 states for the Federal
Fiscal Year ending September 30, 2016.1 The study
includes three major parts:
ll Identification of tax revenues paid to the federal

government from each of the states and of
dollars spent by the federal government in each
state, also referred to as expenditures received
by each state. Federal spending includes direct
payments to or for individuals (for example,
Social Security and Medicare); grants to state
and local governments (for Medicaid and other
programs); military and other procurement;
and wages and salaries for federal government
employees.
ll Analysis of these revenue and expenditure

flows to determine the balance of payments—
that is, the difference between revenues and
expenditures—on the national level and in each
of the 50 states.

In FFY 2016, the federal government spent more
than $3.8 trillion, and brought in approximately $3.3
trillion in revenue, with a budget deficit of $585 billion.
For the purposes of this analysis, certain revenue
and spending amounts were excluded, resulting in
an allocation of $3.6 trillion in expenditures and $3.1
trillion in tax revenues that are relevant and practical
to allocate to the states. Almost 94 percent of federal
receipts and outlays are allocated by state in this
report.2 A summary of the methodology used for this
report can be found in Appendix B.
All figures in this report derive from compilation and
analysis by the Office of the State Comptroller of data
from the United States Office of Management and
Budget, the U.S. Census Bureau, the U.S. Internal
Revenue Service, other federal agencies, the Federal
Procurement Data System, USASpending.gov
and Federal Funds Information for States, unless
otherwise noted.

ll Review of specific elements of federal

revenues and expenditures to identify how the
composition of New York’s balance of payments
differs from other states.

1  For data consistency, national totals and averages in this report include
expenditures in and revenues from the District of Columbia in addition to
the states. However, because it is an outlier in many categories, the District
of Columbia is not included in the rankings of the states. References to
the states as a group in this report include the District of Columbia, unless
otherwise noted.

2  Customs duties and fees and miscellaneous receipts, such as
deposits of earnings by the Federal Reserve, are excluded from revenues.
Undistributed offsetting receipts, net interest on the federal government
debt and spending for international affairs and overseas procurement
(military- and non-military-related) represent most of the outlays excluded
from this analysis. Receipts from and outlays to Puerto Rico and other
outlying areas are also excluded. See Appendix B: Methodology.

New York’s Balance of Payments in the Federal Budget: FFY 2016

5

The Balance of Payments Between the
Federal Government and the States
Most states received substantially more in federal
expenditures than they generated in federal revenues
in FFY 2016. Nationwide, on a per capita basis, the
average gain was $1,708. In other words, the average
individual “received” that much more in federal
expenditures than she or he “paid” in federal taxes.

the national figure of $9,476. New York received
$10,844 in per capita federal spending, slightly
below the national average of $11,183. In other
words, for every dollar New York generated in federal
tax receipts, it received 84 cents back in federal
spending—compared to a national average of $1.18.
The combination of federal tax payments and federal
expenditures resulted in a $2,070 per capita deficit for
the Empire State, for a ranking of 47th in the nation.
Overall, 37 states had a positive balance of payments
with the federal government, and 13—including
New York—had a negative balance, as shown in
Figures 1 and 2.

This was not the case for New York. Unlike most
states, New York’s balance of payments with
Washington was negative.
New York’s per capita contribution to the federal
treasury was $12,914, some 36 percent more than

FIGURE 1
Per Capita Balance of Payments Between the Federal Government and the States, FFY 2016
ME
9

WA
32
ND
49

MT
18
OR
25

ID
16

MN
44

IA
31

NE
41

NV
30

UT
37

CA
39

AZ
13

WI
36

SD
40

WY
46

CO
35

OK
19

IL
43

PA
27
OH
29

IN
28

WV
2

KY
8

AR
12

AL
5

LA
21

VA
4

CT
48
NJ
50
DE
33
MD
7

MA
45
RI
26

NC
20

TN
17

MS
3
TX
38

AK
11

MI
23

MO
14

KS
34

NM
1

NY
47

VT
15 NH
42

SC
10
GA
24

FL
22

HI
6

Deficit

Surplus of $0 to $2,000

Surplus of $2,001 to $4,000

Note: The numbers shown in the map reflect each state’s ranking in per capita balance of payments for FFY 2016,
from most favorable (1) to least favorable (50).

6

New York’s Balance of Payments in the Federal Budget: FFY 2016

Surplus of $4,001 or more

FIGURE 2
Per Capita Balance of Payments Between the
Federal Government and the States, FFY 2016
-$2,000

0

$2,000

New Mexico
West Virginia
Mississippi
Virginia
Alabama
Hawaii
Maryland
Kentucky
Maine
South Carolina
Alaska
Arkansas
Arizona
Missouri
Vermont
Idaho
Tennessee
Montana
Oklahoma
North Carolina
Louisiana
Florida
Michigan
Georgia
Oregon
Rhode Island
Pennsylvania
Indiana
Ohio
National Average
Nevada
Iowa
Washington
Delaware
Kansas
Colorado
Wisconsin
Utah

$4,000

$6,000

$8,000

$10,000

Three of New York’s neighboring states—New Jersey,
Connecticut and Massachusetts—also had a negative
balance of payments. On a per capita basis, New
Jersey, North Dakota, Connecticut, and New York
experienced the largest deficits. Eight of the 10 states
with the largest positive balances of payments were
in the southern or southwestern regions. New
Mexico fared the best, with a per capita surplus of
almost $9,700.
On the basis of total dollars (rather than dollars per
capita), New York’s ranking drops from 47th to 50th,
with a total deficit of nearly $40.9 billion; New Jersey
experienced the next largest such deficit at $27.5
billion. Florida experienced the largest surplus in total
dollars, followed by Virginia. (Figures for all states
appear in Appendix A.)
In October 2015, the Office of the State Comptroller
released an analysis of New York State’s balance
of payments in the federal budget, based on FFY
2013 data. That study found New York’s balance of
payments was a deficit of $19.9 billion, or $1,011
per capita. Among other factors, the growth in New
York’s balance of payments deficit from FFY 2013
to FFY 2016 reflects an increase of more than $25
billion in federal income taxes generated within the
State for the same period. Federal income tax receipts
nationwide increased by more than $232 billion for the
same period, with New York State generating more
than 10 percent of the increase, as the overall federal
deficit declined by nearly $85 billion.

Texas
California
South Dakota
Nebraska
New Hampshire
Illinois
Minnesota
Massachusetts
Wyoming
NEW YORK
Connecticut
North Dakota
New Jersey

New York’s Balance of Payments in the Federal Budget: FFY 2016

7