New York was among more than half of the states across the country to report tax revenues equal to, or greater than, pre-pandemic levels at the one-year mark of COVID-19’s impact, according to a recent independent analysis.
Pew Charitable Trusts in its latest report examined states’ tax recovery efforts, based on available data through February. Collectively, tax revenues in February outpaced losses from the prior year to the tune of 0.01% in year-over year comparisons.
In February, a total of 29 states reported positive tax income, based on comparables from the second month of 2020. New York’s tax revenue at the end of the month reflected a 0.5% increase.
While the overall picture is a positive for a year marked with assorted economic concerns, the Pew researchers did provide a caveat in their findings.
“This means that for states collectively, cumulative tax revenue since the onset of COVID-19 reached pre-pandemic levels for the first time, though without adjustments for inflation,” Pew researchers Barb Rosewicz, Justin Theal and Alexandre Fall wrote in the jointly authored report.
As was the case with most states, New York’s tax revenue plunged in the earliest months of the pandemic. While the state still reported increased year-over-year tax revenues of 6% in March 2020, the swift fallout quickly followed.
In April 2020, state officials reported a 40.6% decline in tax revenue, followed by a 36.9% decline the following month and a 31.3% in June 2020.
By July of last year, as some of Gov. Andrew Cuomo’s heaviest lockdown measures began to ease, tax revenue losses fell to the single digits, ranging from a 6.8% decline in the last two months of summer to a 1.9% decline in the first month of 2021.
While fiscal recovery efforts across New York are ongoing, State Comptroller Thomas DiNapoli said the $82.4 billion in tax receipts through the end of March continued to fuel optimism of a rebound. The reported income was $3 billion more than projected.
DiNapoli’s announcement came as the state’s fiscal year 2020 budget was coming to a close.
“The state’s year-end financial position was significantly better than anticipated,” DiNapoli said in a statement. “We face a long road to recovery, and the state’s economy still faces serious challenges, both in the short-term and long-term.”
He added, “Better-than-anticipated tax collections, federal resources and new revenues in the recently adopted budget allow for important investments in critical programs and services, but state policymakers must ensure that spending commitments are in line with recurring revenue sources.”
Pew Charitable Trusts’ study revealed revenue rebounds across the country varied widely after the earliest months of the pandemic subsided.
By February, Idaho reported an 11% increase in tax revenue, compared to the year prior, while Utah followed behind with a reported increase of 8.7%.
The two states off the mainland reported the sharpest losses early this year, with Alaska reporting a 49.2% decline in February and Hawaii grappling with a 17.4% drop, year-over-year, the same month.