New York vs. Florida, By The Numbers

by | Feb 10, 2023

Comparative governance is a useful course of study, not least because bad governance is so costly to people and prosperity. We often write about the migration from the Northeast to Florida and other states, but sometimes the contrast is best illuminated with some data.

Take a look at the nearby chart comparing some key indicators of governance in a pair of states that not long ago were about the same size—New York and Florida. As recently as 2013 the two states had similar populations, but so many people have moved to the Sunshine State that it’s now roughly 2.6 million people larger.

A Tale of Two States

FLORIDA NEW YORK
State population 22,244,823 19,677,151
Top state income
tax rate		 0 10.9%
Top income tax rate in New York City and Miami 0 14.8%
State sales tax rate 6% 4%
State unemployment rate in December 2022 2.5% 4.3%
Annual state government budget (new proposals by Govs. DeSantis and Hochul) $114.8 billion $227 billion
Medicaid spending in fiscal year 2021 $8.95 billion ($28.76 billion with federal share) $26.47 billion ($73.27 billion with federal share)
Medicaid recipients in December 2022 5,638,561 7,761,755
Real state GDP growth, 2016-2021, in 2012 dollars 17% 8%

WSJ Opinion based on Florida and New York data

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.

As for the state economies, Florida’s jobless rate was 2.5% in December, well below the January national 3.4% rate. New York’s rate was 4.3%, tied with Alaska and Michigan for fifth worst in the country after Nevada, Illinois, Oregon and Delaware. State GDP growth in Florida in 2012 dollars from 2016-2021 was more than double New York’s—17% to 8%.

These comparative statistics don’t tell the whole story about the quality of life in the two states, for better or worse. But they do show that better governance yields better fiscal and economic results. And those results in turn attract more people, which contributes to faster growth and more tax revenue without an income tax. We don’t expect the denizens of Albany to care, but they should.