New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

Dear New Yorkers,

The streets are returning to life again as we head into Fall – six months into the COVID pandemic.  Outdoor dining has been in full swing, while shoppers and students are gradually returning to the sidewalks and subways.

This week’s employment statistics confirm that the City’s economic recovery is picking up. The New York City unemployment rate fell to 16 percent in August, from nearly 20 percent in July, as some 148,000 New Yorkers returned to the employment rolls.  Our recovery is still substantially lagging the nation’s, however. The City’s unemployment rate remains twice the national level, and we have only regained 30 percent of the 896,000 private sector jobs lost between February and April – compared to nearly 50 percent nationally.

We spotlight this week a rise in the rate of delinquent property tax payments that were due July 1.  Although smaller than many had feared – rising from 4.0% last year to 4.7% this year – the increase indicates the degree of economic stress on homeowners and other property owners in the face of the pandemic-induced economic downturn.  The delinquency rate will bear watching in October, when quarterly payments are due, and in particular in January, when the next semi-annual payments come due.

It is my hope that this weekly newsletter serves as a helpful resource and regular update on the city’s progress as we navigate the challenges ahead. New Yorkers are coming together and working harder than ever to build our city back, and their resilience, creativity and determination are nothing short of inspiring.

Scott M. Stringer

The Economy

National Indicators

• The Bureau of Labor Statistics estimates the seasonally adjusted U.S. unemployment rate declined from 10.2% in July to 8.4% in August – the fourth straight monthly decline.
• Tabulations from the Current Population Survey show Black, Hispanic and Asian Americans continue to be hardest hit by the economic impacts of the pandemic (Chart 1). 13.2% of Black, 10.6% of Asian, and 10.5% of Hispanic workers remain out of work, compared to 6.7% of White workers.

Chart 1

SOURCE: Current Population Survey, not seasonally adjusted

• Initial U.S. unemployment claims declined to 860,000 for the week of September 12^th, down from 893,000 the week prior (Chart 2). Continuing claims fell to 12,628,000 for the week of September 5^th, down from 13,544,00 the week prior, a decline of 916,000.

Chart 2

SOURCE: U.S. DOL

• Continuing claims for Pandemic Unemployment Assistance (PUA) fell to 14,467,000 from 14,656,297 the week prior (Chart 3). 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 27.8 million unemployed Americans as of the week ending August 29th (Chart 3).

Chart 3

SOURCE: U.S. DOL

New York City

• New York City unemployment fell from 20.1% in July to 16.3% in August.
• The Current Population Survey shows unemployment rates have fallen substantially with the city’s reopening, but remain elevated particularly among New York City’s immigrant communities. 18.2% of Asian and 16.7% of Hispanic New York City workers remain unemployed (Chart 4).

Chart 4

SOURCE: Current Population Survey, not seasonally adjusted

• New York City private employment grew by 46,300 between July and August, with reopening bars and restaurants accounting for 11,800 of jobs added (Table 1).
• Despite the rebound, August employment remains well below the February peak in most industries, especially in bars, restaurants and hotels.
• One notable exception is Information (particularly film, television, and broadcasting) which saw little decline in employment.
• Employment in Education Services declined from February to April and continued declining through August, as more of these services are provided remotely.

Table 1: 2020 New York City Employment, by Industry (1,000s)

SOURCE: NY DOL

• Initial unemployment claims by New York City residents fell slightly to 36,465 from 36,944 the week prior (Chart 5).

Chart 5

SOURCE: NY DOL

MTA Ridership

• Weekday subway ridership continued to climb through the week ending September 18 (Chart 6). From last Monday to Wednesday, ridership averaged 1.65 million, an increase of 3.1% over the prior week.
• MTA bus ridership also rose modestly, reaching an average of 1.06 million last week.
• As of Wednesday, September 16^th, subway ridership was down 69.5% compared to last year and bus ridership was down 51%.

Chart 6

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

NOTE: Excludes holidays.  Figures for the week ending September 18 includes data through Wednesday, September 16.

COVID Spending

The authorized modified FY 2020 budget for COVID-related spending is $4.01 billion (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.

The City is in the process of finalizing the fiscal year-end close for FY 2020. As of September 16^th, preliminary data shows that $2.77 billion has been committed – that is, the City has incurred obligations for that amount. Medical, surgical and lab supplies, NYC Health + Hospitals, Department of Education, and food/forage expenses account for $1.43 billion, or 52 percent of the commitments. Of the total commitments, $2.59 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 September 16th, the City has registered $3.92 billion in contracts to procure goods and services in response to the COVID pandemic (Table 3). Sixty percent of the contracts, $2.36 billion, are for hotel and food-related contracts and the procurement of personal protective equipment (PPE). Other significant contracts include $505 million for medical staffing for COVID-19, $141 million for ventilators and $100 million for testing centers.

Table 3: Registered COVID Contracts through 09-16-2020

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 $7.02 billion as of Wednesday, September 16. At the same time last year, the City had $4.84 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

SOURCE: Office of the NYC Comptroller

State Developments

• According to the State Comptroller’s cash report for August, through the first five months of the state fiscal year (April to August), state tax collections were 9.5% below last year, a difference of $3.2 billion. For the year to date, consumption and use taxes were down by 18.4%, while personal income tax (PIT) revenue was down by 6.7% and business taxes were down by 7.9%. Tax collections to date were $137 million lower than forecast in the State’s enacted budget.
• The weakness in PIT collections was driven by estimated payments, which were down by 14.0% ($1.3 billion) through August. Withheld PIT revenue was down by 1.2% ($190 million).
• Through August, total all funds disbursements were down by 3.8% ($2.5 billion) compared to the prior year, driven by a 3.8% decline in local assistance ($1.9 billion). State agency personal service spending was down by 4.3% ($275 million). Federal receipts were up by 23.7% ($6.2 billion) and miscellaneous receipts, including bond proceeds, were up by 37.4% ($3.9 billion).

 

Table 4. New York State All Funds Tax Collections

SOURCE: New York State Office of the Comptroller.

 

Spotlight of the Week

First Quarter Property Tax Delinquencies
Up Slightly Compared to 2019

A major concern for the City’s finances was whether property owners would be able to make their property tax payments due July 1^st.  The startlingly high unemployment rate, closed stores, restaurants, and hotels, and empty offices, all meant that homeowners might be hard-pressed to cover costs, and tenants – whether residential or commercial – might fall behind on rent payments, pressuring the incomes of building owners.  Most property taxpayers pay semi-annually (those with properties with an assessed value below $250,000 may pay quarterly), and the City collects over 40 percent of its property tax revenue for the year around the July 1^st due date.

Recently released Department of Finance data shows that as of August 31^st delinquencies on real estate property tax bills for the first quarter (July-September) of the 2020/2021 billing year (FY 2021) totaled just over $646 million, an increase of $122 million from $524 million in 2019/2020 (Table S.1). This represents 4.7 percent of the overall $13.8 billion in property taxes billed, compared to last year’s 4.0 percent rate (Table S.2).

Within property types, the largest increases in delinquencies occurred in Class 4 commercial properties.  The highest rate for delinquent property amounts remained Class 1 (1- to 3-family homes) at 7.6 percent.

Table S.1 First Quarter Property Tax Delinquent Amounts

SOURCE: Office of the NYC Comptroller from Department of Finance Data

Table S.2: Delinquency Rate by Amount Owed

SOURCE: Office of the NYC Comptroller from Department of Finance Data

In contrast, the number of delinquent properties (parcels) actually declined from 2019, except among
Class 4 commercial properties (Table S.3).  Delinquencies continued to be concentrated among lower-valued and/or smaller properties, and for Class 4 properties, even more lower-valued or smaller properties became delinquent. The average tax due for delinquent properties was approximately $5,300 compared to almost $13,000 for all properties.

Table S.3 Delinquency Rate by Number of Parcels

SOURCE: Office of the NYC Comptroller from Department of Finance Data

Within Class 4 (commercial properties), results varied (Table S.4). The delinquency rate for office properties, which account for most of the overall taxes billed, was lower compared to last year. Perhaps not unexpectedly, delinquencies rose significantly for hotels and stores.  There were also significant increases in delinquencies for other property types, which account for a relatively small share of the overall property taxes billed. For instance, the delinquency rate for health centers increased to 18.8 percent from 8.9 percent a year ago.

Table S.4: Delinquency Rate by Amount Owed: Class 4

SOURCE: Office of the NYC Comptroller from Department of Finance Data

In terms of the borough breakdown, Manhattan accounted for almost half of the $122 million increase in delinquent amounts compared to FY 2019 (Table S.5).  Nearly $36 million was due to commercial properties, or 59% of the borough’s increase, slightly above their 54% share of billed values. In percentage terms, the largest increase in delinquent amounts occurred in Queens.  As in Manhattan, in Queens a disproportionate amount of the borough’s $27 million increase in delinquencies came from commercial properties, up by $18 million. Staten Island had the smallest increase in delinquent first quarter payments compared to last year. Taking into account the value of properties, however, Manhattan’s overall delinquency rate by amount was lower compared to the other boroughs.

Table S.5: First Quarter Property Tax Delinquent Amounts, by Borough

SOURCE: Office of the NYC Comptroller from Department of Finance Data

Although first quarter payments appear to have held up reasonably well for most property types, the situation will need to be monitored closely over the coming billing cycles given the severe impact that the pandemic has had on the City’s economy and property markets.