Rep. Israel: Poorer states take NY's share

Rep. Steve Israel, who last year elected not to run for the U.S. Senate seat once held by Daniel Patrick Moynihan, Monday sought to seize the late senator's mantle by charging that New York receives less federal funding than it pays in taxes.

Seeking to revive Moynihan's annual reports highlighting federal funding disparity between New York and other states, Israel (D-Huntington) said the federal government invested $1,143 less per person here than the average New Yorker paid in federal taxes during fiscal years 2005 and 2008.

"Nobody should be paying more than they get," Israel said. "The unfairness should not be based on where you live. That's what really drives me crazy. It's not necessarily the numbers; it is the discrimination against states like New York" that have more high-income earners.

The study was conducted by Dowling College economist Martin Cantor, who last year received a $195,000 Small Business Administration grant for his Long Island Economic and Social Policy Institute. He said Monday's report cost $29,000.

"Other places don't generate their own money," Cantor said. "Somebody else is paying for the growth and strength of the United States, and New York has been shown to be a major contributor. That's not recognized around the country, and that's what Israel wants to bring home."

Long Island Association chief executive Kevin Law, at a news conference with Israel and Cantor, said the region's tax burden is increasing as its population decreases relative to the rest of the country. "Long Island is tired of being an ATM machine for Albany and Washington," Law said.

Cantor's report found that in 2008, the federal government spent an average of $9,041 on the average American, but $8,967 per New Yorker. Israel noted that Virginia, home to the Pentagon, CIA and other federal agencies, received $15,256 per citizen as evidence that the Empire State is being shortchanged.

"Now, I love Virginia," Israel said. "But Virginians don't deserve [almost twice] what New Yorkers got."

Israel said "the fairest" situation would have each state receiving the same share of federal funding that it pays in federal taxes. He was asked if states should just keep all their revenue instead.

"It's priorities!" he said. "The federal formulas need to be changed. It's not as simple as saying it should be 1-1; it's the formulas that need to be changed."

But University of Virginia political scientist Larry Sabato said Israel's logic undermines the need for a federal government.

"Why would you bother to collect federal taxes if there was going to be no redistribution?" he said. "Maybe they need to do a better job of getting military installations there or getting highway funds. The evidence he's citing is actually the justification for a union of states. By definition you're going to have a redistribution of tax revenues. Some of these institutions benefit the whole country, even if they're located in a particular state."