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

Read the Comptroller’s Comments on the FY 2021 Adopted Budget, and remarks at the annual meeting of the New York State Financial Control Board.

The Economy

National Indicators

• Seasonally-adjusted initial claims for unemployment insurance fell for the first week of August to under 1.0 million for the first time since the COVID-19 pandemic began (Chart 1). The unadjusted figure fell to under 832,000, also the lowest figure since the crisis began in March.

Chart 1

• Initial claims for Pandemic Unemployment Assistance, PUA, also continued to fall this week, dropping to 488,622. 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.
• Regular and PUA continuing claims together covered 26.8 million unemployed Americans as of the week ending July 25^th (Chart 2).

Chart 2

New York City

• Initial unemployment claims by New York City residents fell significantly for the 2^nd week in a row, to 28,447, after being essentially flat since late May (Chart 3). (See this week’s Spotlight section for further information on the City’s unemployment insurance recipients and the impact of the expiration of the $600 weekly Pandemic Unemployment Compensation benefit.)

Chart 3

SOURCE: NYS DOL

• For the week ending August 14 (through Wednesday), weekday MTA subway ridership averaged close to 1.29 million, while bus ridership averaged near 1.24 million (Chart 4).
• On Wednesday, August 12, subway ridership was 77% below levels last year and bus ridership was 44% below.

Chart 4

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

NOTE: Excludes holidays.  Figures for the week ending August 14 includes data through Wednesday, August 12.

City Finances

COVID Spending

• The authorized modified FY 2020 budget for COVID-related spending is $4.01 billion (Table 1). 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.
• The City is currently in the process of making end-of-the-fiscal year adjustments to, and finalizing FY 2020 expenditures. Spending commitments as of August 12 have been revised down to $2.16 billion from $2.769 billion.
• Of the total commitments, $2.09 billion has been expended to date, or 97% of committed funds.
• It is likely that some of the budgeted FY 2020 spending will be rolled into FY 2021.

Table 1: COVID19 Budget and Expenditures, FY 2020

SOURCE: Office of the Comptroller from FMS.

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

COVID Contracts

• Through August 12, the City has registered $3.58 billion in contracts to procure goods and services in response to the COVID pandemic (Table 2).
• Contracts for provision of emergency food through the GetFoodNYC program increased by $31 million since last week, to $896 million. Contracts for hotel rooms, primarily for the homeless, increased by $80 million to $429 million.

Table 2: Registered COVID Contracts through 08-12-2020

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 $9.950 billion as of Wednesday, August 12. At the same time last year, the City had $7.539 billion (Chart 5).
• 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 5

State Developments

• On August 13, the State released its First Quarterly Update to the state fiscal year (SFY) 2021 Financial Plan. Since the state budget was adopted in April, the State has lowered its tax revenue forecast for SFY 2021 by $1.1 billion. The State anticipates that total tax collections will fall by 10.2% from $82.9 billion in SFY 2020 to $74.5 billion in SFY 2021.
• The financial plan update also predicts that enrollment growth in public health insurance programs will increase state spending by $665 million in SFY 2021. The state projects that statewide Medicaid enrollment will grow by more than 460,000, or 7.5%, from 6.2 million in SFY 2020 to 6.6 million in SFY 2021.
• While the state general fund budget for the current year remains balanced, the State continues to assume that local aid will be reduced by $8 billion during the year, unless Congress approves additional, unrestricted federal aid to states.

Public Assistance

• Enrollment in mainstream Medicaid managed care in New York City rose by more than 49,000 people in the month of July. Since March, enrollment has grown by 9.0% from about 2.4 million to more than 2.6 million in July.
• In the month of June, New York City recipients of Supplemental Nutrition Assistance Program (SNAP) benefits grew to 1.7 million, an increase of 183,866 recipients, or 12.4%, since March (Chart 6).
• Total recipients of cash assistance in New York City rose by 4.3% in June to 378,302. Since March, the number of cash assistance recipients has risen by 53,286, or 16.4%.

Chart 6

Spotlight of the Week

Unemployment Benefits Uncertainty Threatens City Economy

From March 14 through early August, 1.6 million New York City residents have filed initial unemployment claims. The unemployment rate has swelled to more than 20%. Yet, despite continued restrictions on business activity and virus outbreaks throughout the country, enhanced federal unemployment benefits expired at the end of July, threatening already tenuous personal finances and the broader economy.

In late March, the Coronavirus Aid, Relief and Economic Security (CARES) Act provided an extra $600 weekly jobless benefit. In New York, the payment supplements a maximum regular benefit of $504 per week. The CARES Act also enabled individuals who would otherwise be ineligible, e.g. the self-employed and gig workers, to receive federally funded benefits through the Pandemic Unemployment Assistance (PUA) program. The Center for New York City Affairs recently estimated that, prior to its expiration, the $600 weekly payment provided $760 million to city residents each week. Its expiration will subtract the same amount from local spending power.

The expired assistance will impact households across the city. Excluding PUA recipients, 795,300 New York City residents received traditional state unemployment benefits as of June, more than 11 times the number of beneficiaries in February. (Chart 7) Growth has been most explosive in Queens, with more than 15 times the number of residents receiving traditional state benefits in June (250,300) than in February (16,300).

Chart 7

SOURCE: NYC Comptroller analysis of data published by the New York State Department of Labor.

NOTE: Excludes persons receiving benefits through the PUA program.

Following a congressional impasse, President Trump ordered $300 per week in jobless assistance, retroactive to August 1, through executive action. To be eligible, workers must receive at least $100 per week in state unemployment benefits, which would disqualify many low-wage and part-time workers and may disqualify PUA recipients as well. Funding would come from $44 billion in federal disaster aid, which is projected to last between four and six weeks. Amid legal questions, ongoing congressional negotiations, and the need for new state administrative systems, assistance is not expected to reach households for at least a few weeks, if at all.