This time of year, the television and radio are usually chock full of ads from businesses peddling tax-refund specials for shoppers. However, the Siena College Research Institute’s (SRI) recent poll of New Yorkers shows that many of them will be saving their refunds for a rainy day instead of spending them.
With tax day just behind us, about 53 percent of New Yorkers have already received or expect to receive a refund, according to the poll. Of those, 60 percent say they will use the refund to pay bills, 17 percent will put some money away for retirement, 40 percent plan to save it for emergencies, and only 18 percent plan to spend that refund.
Those spending plans are down only slightly from 19 percent a year ago, but off significantly from five years ago, before the recession, says Donald Levy, SRI director. He did not provide specific figures from five years ago.
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“There is a growing sense that, ‘I need to have a little money in the bank,’ ” Levy says. “That doesn’t bode too well for the economy.”
Retailers need and want people to get out and spend that tax money, he says. It doesn’t benefit them at all if it sits in the bank or if people use it to pay bills. “Those dollars have, in effect, already been spent,” he says of bills, and that paying them off does nothing to stimulate the economy.
The stance toward saving or paying bills reflects the overall consumer confidence the state’s residents have shown, Levy says. Overall confidence is up slightly, he notes. In the first quarter of this year, the confidence of Binghamton–area residents rose 9.1 points to 65.9, according to a separate Siena poll — but confidence is not translating to buying.
“There is a real palpability among consumers that they want to control their spending,” Levy says. Some are motivated by worry about the stability of their job. Others may have a stable job, but are finding that with little to no wage increases, they can’t justify spending the money, especially with the high cost of food and fuel right now, he says.
It’s no surprise, Levy says, that the percentage of savers grew from about 33 percent last year to 40 percent this year. The number of bill-payers dropped slightly from nearly 70 percent in 2011 to 60 percent in 2012.
Looking ahead, more than one-third of New York residents believe they will be better off on Tax Day 2013 than today, according to the survey.
Siena College Research Institute conducted the survey March 25-29 and April 1-3 by random telephone calls to 807 residents. The results have a margin of error of plus or minus 3.5 points.
