New York’s wealthiest residents fled the state at a disproportionate rate during the early days of the COVID-19 pandemic, caused in large part by an exodus from New York City. But newly analyzed data suggests that their rush to leave the Empire State may have come to a halt.
On Tuesday, state and private researchers released separate reports trying to make sense of the latest migration data in New York, examining movement trends that were upended by the pandemic’s onset in 2020 and its massive effect on the five boroughs, in particular.
The first report, from state Comptroller Thomas DiNapoli’s office, found more than 1 out of every 100 state income taxpayers left New York in 2020, including more than 2 out of every 100 in New York City.
The second report — penned by the Fiscal Policy Institute, a left-leaning, labor-backed think tank — drilled down on the economics of those who left.
While wealthier New Yorkers exited at an elevated pace in 2020, that rate returned to pre-pandemic levels in 2022, the second report found, citing federal Census data. From 2017 to 2019 and in 2022, the state’s top 1% of earners — those making more than $815,000 a year — left the state at a slower pace, roughly at a quarter of the rate of everyone else who left.
Nearly three-quarters of those who did leave during the pandemic left for other high-tax states — including New Jersey, Connecticut and California, according to the think tank’s analysis.
Nathan Gusdorf, the Fiscal Policy Institute’s director, says that helps make clear that those who exited the state and city weren’t driven away by New York’s tax policy, which included an income-tax hike on the wealthiest earners in 2021.
“The out-migration among high earners was so concentrated in the core pandemic period, and it was particularly concentrated among people in New York City who could work from home,” Gusdorf said. “So there’s a very clear causal story about high-earning, work-from-home professionals who got out of the city in the middle of COVID. And there’s not a good way to reconstruct this to make it about taxes.”
The reports come as Gov. Kathy Hochul puts together her agenda for the 2024 legislative session in Albany, which is slated to kick off in January. Since taking office in 2021, Hochul has faced immense pressure from left-leaning Democrats to increase taxes on the wealthy as a way to boost spending on everything from education to public transit.
The Democratic governor has until Jan. 16 to unveil her proposal for a state budget expected to exceed the $229 billion spending plan for the current fiscal year. She’s already made clear she has no intention of raising taxes.
“I’m not raising taxes in our budget this year,” Hochul told reporters last month. “Taxes are high enough in the state of New York, and we have to live within our means.”
DiNapoli’s report, meanwhile, includes words of caution for Hochul and state lawmakers as they craft tax policy, noting that the state’s wealthiest taxpayers make up a huge share of the state’s tax base.
Of the 10.8 million income taxpayers in New York in 2021, the top 200 paid 9.5% of all income taxes collected, according to the state Department of Taxation and Finance. The top 200,000 taxpayers paid more than 56% of the total.
“Policymakers need to make sure the state remains an attractive, affordable place to work and to live,” DiNapoli, a Democrat, said in a statement. “Doing so will help maintain the state’s largest revenue source to ensure vital services continue in order to provide a high quality of life for all New Yorkers.”
Hochul and state lawmakers face a March 31 deadline to pass a budget before the state’s new fiscal year begins the next day.
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