New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

We are living through extraordinary times – as a nation, as a City, and as individuals and communities.  A pandemic is raging that has no parallel in the past century. And in an unprecedented move, our economy was put on hold in order to protect lives and “flatten the curve,” resulting in mass layoffs and lost income for hundreds of thousands of New Yorkers, and a dramatic drop in tax revenues.  In these difficult and uncertain times, I offer this weekly update on the state of our City’s economy and finances in order to provide the public, elected officials, advocates and experts with a clear-eyed, sober assessment of the challenges.

Make no mistake – New York City will recover. Together we have overcome many challenges, and I know we will rise to the one ahead.

Sincerely,

Scott M. Stringer

The Economy

National Indicators

• The surge in confirmed COVID-19 cases in sunbelt states is leveling off, a hopeful sign for states hoping to avoid another shutdown.
• The sheer number of infections remains a concern. Both Florida and Texas have confirmed more than 10,000 cases per day in recent days. If surging infections outpace testing capacity, the number of confirmed cases becomes an unreliable measure of the true number of infections.

Chart 1

SOURCE: New York Times COVID-19 repository, via Tracktherecovery.org

• Initial claims for unemployment insurance rose to 1.4 million for the week ending July 18^th, up from 1.3 million the prior week. Continuing claims declined from 17.3 million to 16.2 million.

Chart 2

SOURCE: DOL

Chart 3

SOURCE: DOL – Initial unemployment claims releases

• Regular and PUA continuing claims together covered over 30.5 million unemployed Americans as of July 4, down from 32 million the prior week. Pandemic Unemployment Assistance (PUA), enacted as part of the CARES Act, covers workers who are typically not eligible for state unemployment benefits, including the self-employed or those unable to work due to COVID-19.

New York State and New York City

• Initial unemployment claims by New York City residents declined slightly to 46,205 for the week ending July 18.

Chart 4

SOURCE: NY DOL, Weekly UI Claims Report

Personal Income Tax

• In response to the COVID-19 pandemic, New York State, following the Federal government, deferred the deadline to file State and City personal income taxes from April 15^th to July15^th. Preliminary filing data through July 22nd indicates that overall personal income tax collections are so far running slightly lower ($28 million, or 1.9%) than last year over the same period.
• Extension payments, which are typically made by higher-income filers who will settle their final taxes in October, are slightly higher compared to last year ($19 million). These, combined with lower refunds ($104 million), helped to offset large declines ($146 million) in quarterly estimated payments. Payments with final returns were essentially unchanged.

Table 1: Personal Income Taxes

SOURCE:  NYS Dept. of Taxation and Finance

NOTE:  2019 covers March 29, 2019 through July 22, 2019; 2020 covers March 31, 2020 through July 22, 2020.

• At almost $1.5 billion, this tax filing data is highly anticipated and important but largely reflects economic conditions from last year and is unrelated to current economic conditions resulting from the pandemic. A better barometer of current economic conditions is the withholding tax data associated with monthly payroll. As discussed in New York by the Numbers no. 7 (June 29^th), withholding has declined significantly compared to last year since non-essential businesses were ordered to close in March.

Taxable Sales

• From March through the end of May, New York City taxable sales dropped by nearly $16 billion or 37.6% over the same period last year.
• The decline was most pronounced in certain sectors, particularly in hotels (-88%), restaurants (-69%), and retail sectors including clothing stores (-75%), automobile dealers (-50%), building materials (-31%), gasoline stations (-48%), electronics and appliance stores (-48%), and other miscellaneous store retailers (-60%).
• The cultural sector was also impacted by the shutdown. Taxable sales from arts, entertainment and recreation declined by a combined 72%, while travel arrangements and reservation services declined 74%.
• These losses were only slightly mitigated by an increase in taxable sales in certain sectors such as online shopping – which more than doubled, and other information services.
• Preliminary June tax collections were 47% lower than June a year ago.

Chart 5

SOURCE: NYS Department of Taxation and Finance

Real Estate

• Residential real estate sales volume is down 55% for April through June compared to 2019; commercial sales volume is down by 57%.
• Residential sales volume is 33% below the previous low point in 2009, during the Great Recession, while commercial sales volume is down by 56%.

Chart 6

SOURCE: NYC Department of Finance

Small Business Revenue

• Small business revenue continues to recover, but remains below January levels in all boroughs except for the Bronx.
• Manhattan small business revenue, more dependent on commuters and tourism, is still down 40% from January.

Chart 7

SOURCE: Womply, via tracktherecovery.org

MTA Ridership

• Despite entering phase 4 of reopening on Monday, July 20, average ridership on MTA subways and buses declined slightly from the prior week.
• For the most recent week (through Thursday, July 23), weekday ridership averaged 1.21 million on subways and 1.17 million on buses.

Chart 8

SOURCE: Metropolitan Transportation Authority, Day-by-Day Ridership Numbers.

NOTE: Excludes holidays.  Figures for the week ending July 24 includes data through Thursday, July 23.

City Finances

COVID Spending

• The authorized modified FY 2020 budget for COVID-related spending is $4.01 billion for FY 2020 (Table 2). One third of the budget, $1.34 billion, is for medical, surgical and laboratory supplies. The modified budget also anticipates that $351 million of employee health insurance expenditures will be eligible for Federal COVID reimbursement.
• Of the total authorized COVID budget, $2.85 billion has been committed – that is, the City has incurred obligations for that amount – as of July 22. Medical, surgical and lab supplies account for $1.19 billion of the commitments. Of the total commitments, $1.72 billion has been expended.

Table 2: Covid19 Budget and Expenditures, FY 2020

SOURCE: Office of the Comptroller from FMS.

NOTE: Expenditures in Dept. of Emergency Management, Dept. of Education and Dept. of Homeless Services are net of expenditures for food and forage, shown separately.

COVID Contracts

• Through July 22, the City has registered $3.41 billion in contracts to procure goods and services in response to the COVID pandemic (Table 3). A quarter of the contracts, $852 million, are for the procurement of personal protective equipment (PPE). Other significant contracts include $505 million for medical staffing for COVID-19, food related contracts for $773 million, $349 million for hotels, $146 million for ventilators and $100 million for testing centers, as shown in Table 4.

Table 3: Registered COVID Contracts through 7-22-2020

SOURCE: Office of the Comptroller analysis of NYC FMS data.

NOTE: Includes only contracts with COVID budget codes.

Cash Position

• The City’s central treasury balance (funds available for expenditure) stood at $12.319 billion as of Wednesday, July 22. At the same time last year, the City had $9.002 billion. The Comptroller’s Office’s review of the City’s cash position during the first quarter and projections for cash balances through September 30^th, 2020, are available here.

Chart 9

Public Assistance

• In June, total Medicaid mainstream managed care enrollment in New York City rose by 3.2% overall and 4.0% through the state health exchange. Since March, total Medicaid mainstream managed care enrollment has gone up by 6.9% overall and 10.1% through the exchange.
• The number of New Yorkers receiving Supplemental Nutrition Assistance Program (SNAP) benefits rose by 3.2% in May to 1.6 million recipients. The increase in May follows 4.6% growth in April.
• Total cash assistance recipients in New York City rose by 9.2% in May to 362,769 recipients, the highest level since March 2018.

Spotlight of the Week

Planes, Trains and Automobiles

The pandemic has vastly altered New Yorkers’ travel patterns. Government shutdowns, work-from-home policies, and fear of the virus have kept many residents, commuters, and visitors at home. However, the impact on different modes of transportation has not been uniform.

Amid the closure of nonessential businesses, subway ridership in April dropped to an average of just 8% of typical levels in 2019. Declines on the Long Island Rail Road (LIRR) and Metro-North – the MTA’s commuter railroads – were even steeper.

As the city has reopened, surface transportation has recovered faster. As of June, average ridership on MTA subways and commuter trains was still more than 80% below last year. Conversely, the number of bus riders had climbed to about half of last year’s level. Meanwhile, car traffic on MTA bridges and tunnels in June reached 74% of 2019 levels.

Chart 10

SOURCE: NYC Comptroller’s Office analysis of MTA Day-by-Day Ridership Numbers and U.S. Transportation Security Administration Checkpoint Travel Numbers for 2020 and 2019.