ALBANY, N.Y. — New York State Comptroller Thomas DiNapoli warned on July 15 that the state’s $277 billion fiscal 2027 budget carries growing long-term risk. Spending is projected to rise 7%, while receipts increase only 1.1%.
The financial plan shows gaps reached $31.8 billion across fiscal years 2028 through 2030. New York also expects to use $1.3 billion from its General Fund balance while keeping total reserves near $15 billion.
The fiscal warning intensifies debate over New York’s taxes and competitiveness. The state still has tens of thousands of millionaire taxpayers, but its national share has declined as California, Florida and Texas gained ground.
Budget Growth Outpaces Revenue
The enacted budget increases all-funds spending by $18.1 billion from the previous fiscal year. Projected receipts rise by $2.8 billion to $269.8 billion, leaving spending growth far ahead of revenue growth.
Medicaid and school aid account for much of the pressure. Medicaid spending across state agencies is projected to reach $53.3 billion by fiscal 2030. School aid is expected to reach $43.7 billion.
Those programs support health care and education across the state. Their growing cost leaves less flexibility when economic conditions weaken, or federal support falls.
DiNapoli said stagnant reserves could place essential investments at risk during a downturn. He urged policymakers to match recurring spending with dependable recurring revenue.
Millionaire Growth Trails Rival States
New York’s millionaire population has grown substantially, but it has not kept pace with national growth. The state’s share fell to 8.7% in 2022, down from 12.7% in 2010.
The number of millionaire filers nearly doubled during that period, increasing from 35,802 to 69,780. The national millionaire population grew 184%, while California and Texas more than tripled their totals. Florida’s total quadrupled.
New York fell from second to fourth among states by millionaire population in 2022. California ranked first, followed by Florida and Texas.
New York State could have collected an estimated $10.7 billion more in personal income taxes during 2022 if it had retained its 2010 national share. New York City could have received another $2.5 billion.
Those figures represent estimated forgone growth, not revenue removed from government accounts. They measure potential collections from a larger millionaire population.
High Earners Support Tax Collections
The state’s dependence on top earners remains unusually high. Preliminary tax-year 2024 figures show 99,404 millionaire returns, the largest total in the available series.
Although they represented less than 1% of filers, millionaires paid 44.6% statewide in personal income tax liability. The top 200 taxpayers generated 7.7% of the total.
That concentration helps New York raise substantial revenue during strong financial markets. It also exposes the budget to changes in bonuses, capital gains, business profits and residency decisions.
Personal income taxes supplied more than half of state tax collections in fiscal 2026. Modest shifts among high-income households can therefore affect funding for public services.
Out-Migration Continues at Slower Pace
New York recorded 121,251 incoming part-year tax filers in 2024 and 134,913 departing filers. The net loss was 13,662, equal to roughly one in every 1,000 resident taxpayers.
The loss was smaller than in every year since at least 2015. It remained far below the pandemic-era peak of 112,458 net departures in 2020.
Married households earning between $100,000 and $500,000 produced the largest numerical loss in 2024. Nearly 8,200 more filers left than arrived in that group.
Households earning at least $500,000 had the highest departure rate, at about 1%. Single filers recorded net gains for the third consecutive year.
The migration figures do not equal total population change. They count part-year income-tax filers whose returns indicate that they entered or left New York.
Taxes Are Part of the Pressure
New York’s top state personal income tax rate reaches 10.9%. New York City adds a top municipal rate of 3.876%, bringing the combined top rate to 14.776% for the highest-income city residents.
Taxes are not the only factor influencing relocation. Housing costs, employment changes, remote work, family needs and public services also shape residency decisions.
New York City experienced the nation’s largest numerical municipal decline between 2024 and 2025. The city population fell 12,196, even as several midsized communities near the metropolitan area grew.
The contrast suggests some households still value access to the New York economy but seek lower costs or different housing options. It does not establish that taxes alone caused the decline.
California also maintained high taxes while expanding its millionaire share faster than New York. That pattern points to broader competition involving business growth, housing, wages, infrastructure and public services.
October Update Will Clarify Risks
New York’s current budget remains balanced under state projections. The widening future gaps will require spending changes, additional revenue, stronger economic growth or a combination of those measures.
The next official financial plan update is due on or before Oct. 30. It will provide revised figures for receipts, spending, federal funding risks and projected gaps through fiscal 2030.
Until then, New York must finance expanding commitments while protecting the taxpayers and economic activity that support them.
