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

Editor’s Note: New York by the Numbers will be taking a break for a couple weeks, and returning on Monday September 14^th.

The Economy

National Indicators

• Seasonally-adjust initial claims for unemployment insurance rose slightly to 1.1 million (Chart 1). Continuing claims fell to under 15 million for the first time since the beginning of April.

Chart 1

SOURCE: U.S. DOL

• Continuing claims for Pandemic Unemployment Assistance (PUA) rose slightly to 11.2 million (Chart 2).

Chart 2

SOURCE: U.S. DOL

New York City

• New York City private employment continues to rebound from the impact of the pandemic. Private employment increased to 3.4 million (Chart 3), an increase of over 100,000 from June, driven by reopening hotels, restaurants and retail.

Chart 3

SOURCE: NYS DOL, seasonally adjusted by NYC OMB.

• Initial unemployment claims by New York City residents rose slightly to 33,591, up from 28,447 the week prior (Chart 4).

Chart 4

SOURCE: NYS DOL

• Weekday MTA subway and bus ridership has continued to slowly increase. For the week ending August 21 (through Wednesday), weekday ridership averaged close to 1.32 million on the subway and 1.26 million on buses (Chart 5).
• As of Wednesday, August 19, subway ridership was 77% below levels last year and bus ridership was 44% below.

Chart 5

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

NOTE: Excludes holidays.  Figures for the week ending August 21 includes data through Wednesday, August 19.

City Finances

• Hotel occupancy tax revenue plunged by almost 80% year-over year in the last quarter of Fiscal Year (FY) 2020, underscoring the catastrophic impact that the pandemic has had on the hospitality sector.
• At an annualized rate, fourth quarter occupancy tax revenue corresponds to levels last seen in the 1980s, an indication of the long road ahead to recovery for this sector.

Chart 6

SOURCE: Office of the Comptroller from FMS., excludes audit revenue. NYC fiscal year is July1-June30

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.
• Of the total authorized COVID budget, $2.41 billion has been committed – that is, the City has incurred obligations for that amount – as of August 19. Medical, surgical and lab supplies and food/forage account for $900 billion of the commitments. Of the total commitments, $2.38 billion has been expended

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 19, the City has registered $3.59 billion in contracts to procure goods and services in response to the COVID pandemic (Table 2). Almost half of the contracts, $1.69 billion, are for food related contracts and the procurement of personal protective equipment (PPE). Other significant contracts include $505 million for medical staffing for COVID-19, $429 million for hotels, $141 million for ventilators and $100 million for testing centers, as shown in Table 2.

Table 2: Registered COVID Contracts through 08-19-2020

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 $9.135 billion as of Wednesday, August 19. At the same time last year, the City had $5.824 billion (Chart 7).
• The Comptroller’s Office’s review of the City’s cash position during the first quarter and projections for cash balances through September 30th, 2020, are available here.

Chart 7

State Developments

• On August 13, New York State released an updated financial plan for state fiscal year 2021, which showed a $14.5 billion decline in revenue estimates since February. The updated plan lowered the total revenue forecast by $1.2 billion, as compared to the enacted budget in April.
• According to the State Comptroller’s cash report for July, through the first four months of the state fiscal year total state tax collections were 10.2% below collections last year, a difference of nearly $3 billion. Consumption and use taxes were down by 21.1%, while personal income tax revenue was down 6.8% and business taxes were down 11.3%.
• In the month of July, state tax collections were $7.2 billion higher than the prior year, largely due to the extended deadline for filing income tax returns.
• Actual collections through July were $343 million lower than forecast in the State’s enacted budget. The State has seen a shortfall of $382 million in consumption taxes and $148 million in business taxes. However, personal income tax collections were $135 million better than forecast and other taxes were $52 million above projections.

Table 3: New York State All Funds Tax Collections ($ in millions)

SOURCE: New York State Office of the Comptroller.

Spotlight of the Week

Postal Service Delivery Times

With an upcoming election and an ongoing pandemic, the United States Postal Service has a critical role to play in getting mail-in ballots delivered and returned. Voting by mail allows voters to exercise their rights without jeopardizing their health, but could strain postal service capacity, even in the absence of deliberate attempts to undermine voting.

Postal Service performance has already suffered under the pandemic, especially in New York City.  Postal data show that between April and June 2020, New York City had the lowest rate of on-time delivery in the country.

Chart 8

SOURCE: USPS, single-piece, first-class, three-to- five day mail delivered on time.

The Postal Service began publishing data on-time performance data in 2019. Viewed over time, the data show New York City on-time delivery was already lower than the rest of the country before the pandemic. During the pandemic New York City performance declined more than anywhere else in the country, even compared to other hard-hit areas. Also of concern, the data show that in 2019 on-time performance declined during the October to December period that will critical for voting in 2020.

Chart 9

SOURCE: USPS, single-piece, first-class, three-to- five day mail delivered on time. https://about.usps.com/what/performance/service-performance/historical_trends/index.htm. Bronx and Manhattan zip codes. Delivery performance in other boroughs was similarly affected.

As the pandemic continues to abate in New York City, it will likely results in fewer sick postal workers and less direct impact on delivery performance going forward. However, New York City consumers are likely to continue doing more of their shopping online. This will continue to place a higher burden on delivery services.