New York Has Nation’s Highest State and Local Taxes

Published September 1, 2004

No matter how you measure it, New York State is still No. 1 in combined state and local taxes, an analysis of the most recent U.S. Census Bureau data shows. The study was released on July 24 by the Public Policy Institute of New York State, the research affiliate of the Business Council of New York State.

In fiscal 2002, New York’s overall state and local taxes averaged $4,645 for every state resident, according to the study. That figure was highest in the country, and some 48 percent above the national average of $3,149 per person.

The Census data on state and local government finances showed New York’s combined state and local taxes on individual income are more than twice the national average, as are corporate income taxes, on a per-capita basis. General sales taxes, per capita, were 11 percent higher in New York than the national average.

All of that adds up to a total additional tax burden of $28.6 billion on New Yorkers, compared to what they would pay if state and local taxes in the state were at the national average, the study noted.

Taxes Also Highest in Relation to Income

Using another common measure of taxes related to income, state and local taxes in New York averaged $131 for every $1,000 of personal income residents earned. That figure, too, is highest in the country, 26 percent above average for this measure.

The data do not include the state-level tax increases New York’s legislature imposed in 2003, nor the property tax increases most counties and school districts imposed over the past two years.

Local taxes in the Empire State are especially far out of line with all states. As of 2002, New Yorkers paid an average of $2,384 per person in property and other taxes to local school districts, municipalities, and county governments. That figure was 85 percent above the average for all states.

State Also Has High Debt

Besides high taxes, New York’s state and local government leaders have incurred a heavy debt burden on behalf of the state’s taxpayers. The institute’s analysis found state and local debt in New York adds up to $10,306 for every state resident, the second-heaviest debt burden in the nation, behind California.

High taxes and heavy debt are driven by high spending levels. The state government, school districts, counties, cities, towns, and other government units spent an average of $10,376 per capita in 2002. That figure was 46 percent above the national average. New York leads the nation in Medicaid spending and is among the national leaders in spending on education, welfare, and other programs.

The institute analyzed new data posted on the Census Bureau Web site July 15. The Census data, which include detailed financial figures for each state, are available at

Robert Ward ([email protected]) is director of research for the Public Policy Institute of New York State.