Quick Search Tags
Smith's Research & Gradings
August 3, 2020

Smith's Research & Gradings

New York Is No "Donor State"

New York Is No "Donor State"

In  truth,  high-tax  blue  states  are  net  "receivers"  of federal funds, New York foremost among them, according to Matthew Schoenfeld, a Chicago-based municipal bond portfolio manager.

He gored one of the sacred cows of  New Yorkers (and many municipal analysts). What's more, Mr. Schoenfeld did it publicly — in the Wall Street Journal's Opinion Page on July 22, 2020. Governor Andrew  Cuomo,  (D.NY)  has  repeatedly flouted a list of "donor states" topped by New York, which "gives" $29 bln. a year more than it "got" from 2015 through 2018. The source of the Governor's claim is the Rockefeller Institute's "Giving or Getting" which was published in 2017.

Mr. Schoenfeld wrote, "It isn't so simple. A food stamp isn't the same as a serviceman's paycheck. The former can be characterized as a federal subsidy — a gift in Mr. Cuomo's parlance — while the latter cannot. The Rockefeller report treats both as gifts, distorting who gets what.

"Texas is home to nearly 219,000 military personnel, New York 60,000. It's no surprise federal defense-related ex- penditures in Texas dwarfed those in New York. From this the Rockefeller report implies Texas got $51 bln. more than New York — for the privilege of defending the whole country." That doesn't square. If the DOD's spending is used to allocate the "value of the defense provided by the federal government by population" in 2018, New York got $2 bln. more than it gave.

What's  more  Mr.  Schoenfeld's  analysis  shows  how blue  states  disproportionately  reap  the  benefits  of  federal subsidization  for  municipal  debt issuance.   Based  on  the Congressional Budget Office 2018 estimate, New York State got more than $9 bln. than it received (bringing the total got to $11 bln.) Back out the $2 bln. in social security payments that  New York  State  avoids  because  its  retirees  move  to warmer climates, and the "get" grows to $13 bln.

Take notice

Stay on top of the latest global news that can impact your investment strategy.

US Economy – Growth on Track for Now…

The International Monetary Fund (IMF) has just released its April 2024 Economic Outlook. According to the Washington-based multilateral agency, the U.S. is on track for 2.7% real GDP growth rate in 2024, driven by strong household spending and investment (with a fair amount coming from the federal government).

Hawkins Reviews Financial Data Transparency Act

Hawkins Delafield & Wood, New York City's legendary municipal law firm, published a "Hawkins Advisory" that reviews the Financial Data Transparency Act of 2022 (FDTA), which was signed into law on December 23, 2022; developments in enforcement actions regarding limited offerings; and the status of certain pending rulemaking by the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB).

Treasury Secretary to Close COVID-19 Lending Facilities

On Thursday, November 19, Treasury Secretary Mnuchin sent a letter to Fed Chair Powell indicating that he would be allowing most of the Fed's 13(3) emergency lending facilities to expire at year-end, and requesting that the Fed "return unused funds to the Treasury" in order for Congress to "re-appropriate $455 billion, consisting of $429 billion in excess Treasury funds for the Federal Reserve facilities and $26 billion in unused Treasury direct loan funds."

Subscribe Today to unlock insights that could impact you tomorrow!

With your monthly or yearly Subscription you will unlock online articles and have the ability to download the full PDF files for the publication.
$79.95 / Per Month
$850 / Year (Save 30%)
* Discounted Rates for Issuers and Governmental Entities

Smith's Research & Gradings focuses on the people, sectors and news that matter the most to you. Smith's analysis is an indispensable part of Wall Street and the world's capital markets. Our approach was inspired by the need for a consistent analytical approach across all asset classes.

$79.50 / Per Month
$850 / Year (Save 30%)
* Discounted Rates for Issuers and Governmental Entities

Let a subscription to The Global Economic Doctor provide you with access to sovereign news, analysis and insights. Concise and powerful, the Global Economic Doctor spans the globe, giving you a read on how today’s market developments and key players are impacting your business around the planet.