Don’t look now, but the feds are dropping more cash from helicopters — and the Empire State is already grabbing a big handful.

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Despite growing signs that Congress is finding it harder to spend with reckless abandon, New York State budget negotiators were counting on getting $1 billion in added Federal Medicaid Reimbursement Percentage (FMAP) aid under the so-called “jobs bill” expected to move through the U.S. Senate today.  Thursday.  Except … the bill didn’t move.  It was withdrawn, by Majority Leader Harry Reid (D-Nevada) before coming to a vote, once it became apparent that it wouldn’t garner enough votes to pass on its third try.

From Politico:

In stepping back now and pulling the bill, Reid made clear that he isn’t expecting a quick return.

The Senate will go home at the end of next week for the July Fourth recess and then return to what many expect will be a debate on energy policy. The long August recess follows, and, absent some breakthrough, Reid seems prepared to wait until after Labor Day before trying again.

By the way, the latest version of the bill the one Reid withdrew called for less FMAP money than the original.  In an effort to attract support from Republican moderates like Sen. Susan Collins of Maine, “$24 billion in new state assistance to pay Medicaid bills was scaled back to $16 billion and then phased out, as Collins had suggested, and fully paid for with offsets,” Politico noted.

In other words, the $1 billion originally expected by New York was really going to be more like $660 million.  And now, it may be three months before it’s clear that any of the dough will ever materialize.   Chalk it up as another example of why the entire Obama-era approach of providing temporary aid to states (on the Keynesian grounds that austerity measures will strangle the recovery) has actually tended to make a bad situation worse in places like Albany, where avoiding tough budget decisions is an art form.

Someone might want to convey this news to Governor Paterson and Democratic legislative leaders, who claim they are within striking distance of a budget deal to beat Paterson’s Monday deadline.

By the way, the newly agreed-upon New York City budget also assumes an increase in FMAP from the same federal legislation.  But the city budgeted its share much more conservatively, spreading a projected $600 million in added FMAP over three years, with $279 million included in the notional 2011 fiscal plan.  Mayor Bloomberg still has billions in reserve; for the city, unlike the state, a reduction in federal aid won’t spell the difference between red ink and redder ink.

New York has the second most progressive distribution of federal income taxes among the 50 states, according to a new analysis from the Tax Foundation.

From the Tax Foundation’s Fiscal Fact:

Taxpayers earning more than $200,000 earned 40 percent of [New York] state’s AGI but paid 63 percent of the state’s federal income taxes. Indeed, they paid three times as much in federal income taxes as every taxpayer earning under $100,000 paid combined.

Connecticut had the most progressive federal tax distribution, with filers in the above-$200,000 bracket paying 66 percent while earning 44 percent of adjuste dgross income (AGI).

The Tax Foundation analysis is based on IRS data for federal individual income taxes paid in 2008.  But New York State’s own personal income tax is similarly progressive, according to figures in the “Economic and Revenue Outlook” volume of the 2010-11 Executive Budget.

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A Democratic state lawmaker from Buffalo is urging U.S. Sen. Charles Schumer to oppose President Obama’s proposed tax on financial institutions.

Assemblyman Sam Hoyt says he believes the tax, which Obama calls a “Financial Crisis Responsibility Fee” (FCRF) “will harm the banking industry’s ability to provide credit market services, which will in turn impair financial recovery.”  Banking is a major employer in Buffalo, where HSBC and M&T Bank have corporate offices.

Hoyt’s money graf:

As you know, the FCRF would impose a .15 percent tax on the covered liabilities of banks and other financial institutions. This punitive tax would negatively impact the ability to leverage capital for private-sector business, which will in turn damage employment and investment conditions. A stronger focus on collecting outstanding Troubled Asset Relief Program (TARP) funds appears to be a more reasonable option. As New York State struggles with the worst financial crisis since the Great Depression, wrestling with a multi-billion dollar state deficit that has ballooned largely because of the state’s position as the center of the banking industry, it is imperative that the financial sector be given every opportunity to rebound. The FCRF is no such opportunity for growth.

Schumer, however, has come out in favor of the bank tax. Sen. Kirsten Gillibrand has said she is “concerned” about the tax, but her position otherwise seems unclear.  As this recent Times story noted: “The senator has yet to say whether she supports or opposes the Obama proposal, even as her potential rival for the Democratic nomination, Harold E. Ford Jr., positions himself as a defender of Wall Street, where he is getting much of his initial support. Instead, Ms. Gillibrand has proposed giving banks a break on the tax based on how many loans they provide to small businesses.”

Hoyt’s letter is posted here.

The net flow of funds from New York State to Washington was a famous obsession of the late Sen. Daniel P. Moynihan, who collaborated on an annual report (nicknamed “The Fisc”) to track the numbers.   Today, the federal government issued its annual accounting of one side of that ledger–the Consolidated Federal Funds Report for Fiscal Year 2008, including a breakdown of federal government funding obligations (but not revenues) by state and county, along with a companion volume, Federal Aid to the States for Fiscal 2008, which tabulates actual expenditures on state and local government grants only.

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