ALBANY — State tax receipts were down 9% or $766.9 million in May because of the economic shutdown aimed at reducing the spread of the coronavirus, according to state Comptroller Thomas DiNapoli.
“With an economy still suffocated by a pandemic, the state’s finances took another serious hit in the month of May,” DiNapoli said in issuing his report late Monday. “We are now clearly seeing the recession’s impact on tax receipts. As we continue to slowly reopen the economy, it’s critical that Washington act on our call for more federal aid.”
Last week, DiNapoli reported that sales tax revenues for local governments dropped 32.2% in May compared with the same month last year. That included a 33.6% drop on Long Island. Throughout the state, local government sales revenue was $918 million in May, or $437 million less than in May 2019.
Gov. Andrew M. Cuomo says there is an urgent need for another stimulus package from Washington to contend with a $13.3 billion state budget deficit. Without it, Cuomo said he will need to cut 20% from the current state budget, including school aid.
Cuomo ordered a shutdown of the state’s economy in March to try to head off the rising infection and death rates from the virus. But the shutdown also led to falling tax revenues while increasing costs to fight the virus and to pay unemployment insurance to record high numbers of New Yorkers.
Among the declining revenue was personal income taxes withheld from paychecks. DiNapoli said the tax withholding revenue was down 9% in May, or $291.8 million less than in May 2019.
The Cuomo administration said it is tracking the lost revenue closely.
“This shows exactly what we have expected: The pandemic is causing a deep downturn in revenues,” said Freeman Klopott, Cuomo’s budget spokesman. “Unlike the federal government, the state can’t print money and must balance its budget and the federal government must act to offset this revenue loss or states will be unable to lead the nation to economic recovery as hospitals, schools and the most vulnerable among us carry the burden of spending cuts.”
David Friedfel of the independent Citizens Budget Commission said the reports show the need for Cuomo to make hard fiscal cuts now.
“While declines in the first two months of the year are troubling, July collections may pose the largest risk,” Friedfel said. “The state assumed that due to the delay in the tax filing deadline approximately $8 billion in personal income tax payments will be made in July that would normally be paid in April. But this is unchartered territory so it is hard to predict how taxpayers will act ..."