Heavily taxed blue states such as New York and California last year had some of the country's most drastic drops in tax revenue. At the same time, Republican states are enjoying the highest revenue increases even as they keep income taxes low.
Under Democratic governor Gavin Newsom, California has turned a $100 billion budget surplus into a $32 billion deficit, Bloomberg reported Friday, forcing the state to trim its "lofty climate change program, delay funding, and increase internal borrowing." In this year alone, the once-Golden State has seen its tax revenue crater by nearly 25 percent as it hemorrhages wealthy residents to lower-taxed states.
New York, which under Democratic governor Kathy Hochul has the highest tax burden in the country, saw a similar revenue drop of almost 20 percent. Both California and New York last year saw their populations shrink by about 294,000 residents, Bloomberg reported.
California and New York aren't the only blue states with tax problems. Illinois, New Jersey, and Hawaii also reported drops, according to Bloomberg, though theirs weren't nearly as drastic.
The news comes as Newsom snipes at Republicans, particularly Florida governor Ron DeSantis. Newsom has called DeSantis a "small, pathetic man" and denied the exodus away from California. Hochul, meanwhile, wants to tax drivers entering New York City and ban gas stoves in the name of climate change.
While California and New York see their tax bases evaporate, Republican states such as Florida and Texas are seeing revenue growth. Florida last year had a 9 percent bump in tax money, while Texas saw a staggering 12 percent increase. Both states "added about 888,000 residents" last year, Bloomberg reported.
Florida under DeSantis and Texas under Gov. Greg Abbott now have record-breaking budget surpluses of $21.8 billion and $33 billion, respectively.
"We make tough choices, and we make sure we look forward to the long haul," DeSantis said in May.