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The Citizens Budget Commission erred in a widely quoted report that said New Yorkers pay the nation’s highest combined state and local taxes. The commission intends to revise the report, an official there said.

Doug Offerman told City Limits “adjustments” will be made to the study’s claim that “New Yorkers are the most heavily taxed Americans.” He also acknowledged that the study erred by making it appear that local taxes are lower in New York City than in the rest of the state.

The report, “Fixing New York State’s Fiscal Practices,” got heavy play in the city’s news media with a chart showing New York collects $141 in state and local taxes for every $1,000 of its residents’ income–the most in the nation. It was released for a November conference in which the budget panel gathered political, civic and business leaders with the aim of reshaping how Albany manages the state’s money.

But the figures were drawn from data not meant to show what New Yorkers actually pay. The numbers were skewed because they include New York state personal income taxes paid by out-of-state residents, as well as capital gains taxes, but not the associated income.

When asked if it is accurate to say that New York state residents pay the heaviest combined state and local tax burden–as the study alleged–Offerman responded: “The answer is: It depends. It depends on whether we are including capital gains and whether we are measuring personal income measured for places of residence. If you define personal income as being based on place of work, and you exclude capital gains…New York is the highest. But if you adjust for place of residence or if you adjust for capital gains, New York is second to Maine.”

This means that New York State residents would be the most heavily taxed Americans if they also had to pay the taxes of some New Jersey and Connecticut residents.

“I think that they should just admit that what they did was wrong, that it’s misleading,” said Frank Mauro, executive director of the Fiscal Policy Institute, a liberal think tank. He said he had pointed out errors to researchers at the budget panel, which is a nonpartisan, business-supported civic group.

According to the Citizens Budget Commission study, the data showing that New Yorkers pay the highest taxes come from a chart the state Department of Taxation and Finance released last March for fiscal year 2000. The chart was part of the New York State Tax Sourcebook, which warns that the U.S. Commerce Department information “does not show who actually pays taxes.”

The same state report explained why: Out-of-state residents paid 14 percent of the New York state personal income tax in 2000, and although the tax income was reflected in the chart, the income wasn’t. The data Citizens Budget Commission used had in effect burdened New York residents with about $3 billion in taxes they didn’t pay. The report included a similar warning about capital gains, which were unusually large in 2000.

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