(The Center Square) – New York state government is flush with money with the latest data showing a nearly $9 billion budget surplus in the current fiscal year amid a Wall Street boom and stronger-than-expected income tax collections.
In a new report, the state Division of the Budget said the latest economic data shows New York is now facing a $8.9 billion budget gap over the next three years, down from an estimated $14.7 billion earlier this year.
The mid-year financial report, released just days before New Yorkers head to the polls to choose their next governor, attributed reduced deficit to higher-than-expected tax receipts, a robust Wall Street economy and other favorable economic conditions that have resulted in a roughly $9 billion surplus, allowing the state to revise projections for coming fiscal years.
The projected budget gap for next year has now dropped from $6.4 billion to $2.9 billion, while the projected budget gap for the 2029 fiscal year has fallen from $10.5 billion to $5.8 billion, according to the report.
The better-than-expected economic outlook for the state comes as Democratic Gov. Kathy Hochul seeks another term in office amid a challenge from Nassau County Executive Bruce Blakeman, a Trump-backed Republican, who has hammered away at Hochul over her economic policies, which he claims have driven up the cost of living for average New Yorkers.
“They don’t know how to run a large organization. Our budget in New York state is twice the size of the state of Florida and there are four million more people in Florida,” Blakeman said at a campaign rally earlier this week. “We don’t have a revenue problem in New York state, we have a spending problem.”
On the campaign trail, Hochul has defended her handling of New York’s economy since she took over as governor in 2021, pointing to the state’s gross domestic product expansion and middle-class tax relief during her tenure. New York’s economy grew 4% in the second quarter of 2026, the fastest of any state and nearly double the national rate.
“New York’s economy is growing faster than any other state in the nation – and we made it happen by driving innovation, creating good jobs and investing in our communities,” Hochul said last week. “I’ll continue building on this progress every day, as my administration moves forward with nation-leading policies and investments to keep sparking even more economic growth and put more money in the pockets of New York families.”
New York collected an average of $12,495 in taxes per person in 2023 – 52% more than the national average – and the most per $1,000 of personal income, according to a recent report by the nonpartisan Citizens Budget Commission, which found that New York state and its localities were the highest-taxing and third-highest-spending in the nation.
Collectively, the state and local governments collected more revenue from many types of taxes – property, personal income, corporate, and sales – than most other states and their localities, the report said.
Critics say the state’s high tax burden impacts its economic growth and contributes to an exodus of businesses and taxpayers to other states.
Meanwhile, a report released in July by State Comptroller Tom DiNapoli said the $277 billion state budget signed by Hochul this year amounts to an increase of 7% from the previous fiscal year budget, with spending projected to exceed revenues for the next two years. He said the practice raises questions about the state’s long-term fiscal sustainability.
