Civics: Spending more for less

Wall Street Journal:

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.