Yet, believe it or not, Florida’s state budget as measured in the latest proposals from the two governors, is only half the size of New York’s. This is in part a reflection of their tax burden, which in Florida is much smaller. If Florida politicians want to spend more, the state’s economy has to grow more. New York’s politicians can raise income taxes, as they do with great frequency.
Florida has no state income tax, while New York’s top tax rate is 10.9%. In New York City, the top rate is 14.8%, while in Miami it’s zero. Any guess why Ken Griffin moved his Citadel hedge fund to Miami instead of New York when he was looking for an alternative to Chicago? Florida has a 6% sales tax, higher than New York’s, but New York City’s combined state and city sales tax is 8.875%.
One of New York’s biggest budget busters is Medicaid, with 38.6% of the population on the rolls at the end of 2022. The state spent $26.47 billion on the joint state-federal program, or $73.27 billion with the federal contribution. Contrast that with Florida, where 25% of the population is on Medicaid and the cost is about two-thirds less than New York’s. We doubt the quality of medical outcomes is vastly different for Medicaid patients in the two states, despite the disparity in funding.