New York’s top money manager released a new report showing the state’s tax collections were negatively impacted by people leaving the state due to the pandemic — issuing a word of caution to lawmakers ahead of budget season.

State Comptroller Thomas DiNapoli published a review of the data from the state Department of Taxation and Finance, comparing tax collection information between 2020 and 2021 to pre-pandemic trends.

What You Need To Know

  • The analysis revealed that more net individuals left New York, a majority of those living in the five boroughs, in both 2020 and 2021 than moved in, compared to pre-pandemic years

  • Personal income tax filers make up the largest portion of New York's tax collections

  • The report's release comes as state lawmakers and Gov. Kathy Hochul are about to negotiate a budget

The analysis revealed that more individuals left New York, a majority of those living in the five boroughs, in both 2020 and 2021 than moved in, compared to pre-pandemic years. Single people, as opposed to married couples or families with dependents, are the largest group of personal income tax filers.

DiNapoli’s report also shows they make up the largest group exiting the state.

People who filed annual tax returns as part-year filers also jumped in both 2020 and 2021, and the number of non-resident taxpayers also increased.

“In 2021, the total number of New York’s personal income tax filers declined for the first time since the Great Recession,” he wrote in the 22-page report published Tuesday. “As net departures and out-migration rates remained elevated in 2021, the total number of nonresident taxpayers grew.”

“With nonresidents comprising over half of full-year filers at the highest income levels, and with high-income earners comprising a large share of personal income tax collections, policy makers will need to carefully consider the effect of the movement of taxpayers on State tax and budget matters,” he added.

DiNapoli appears to warn lawmakers against disrupting the current personal income tax rates, as that collection is the state’s largest and most consistent revenue source.

The report’s release comes at a time when Gov. Kathy Hochul and the Democratic-controlled state Legislature are deliberating next year’s budget and how they’ll fund new and continuing priorities, such as healthcare and education.

“As economic conditions change and both federal and State tax policy actions evolve, policy makers will need to monitor the movement of taxpayers to preserve the state’s largest revenue source and ensure vital services can continue to be provided,” the report states.

Hochul warned she’d rather scale back spending on sectors like the migrant funding, resisting preemptive calls by the left-leaning flank of the Democratic party to raise taxes on the wealthy.

The state already faces economic headwinds. For example, they’re helping the city pay its multi-billion dollar tab for the influx of migrants.

Fiscal hawks, including DiNapoli, previously warned lower than expected tax revenue collection projections could hurt New York’s spending plans.

Former Gov. Andrew Cuomo last raised income taxes on New York’s highest income earners in 2021.