New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

Dear New Yorkers,

As the days get colder, and New Yorkers spend more time indoors, the number of Covid-19 infections is rising again in the U.S., New York State, and in New York City. It is not a time to panic, but it is no time to pretend our struggles are over either. Let’s stay vigilant, mask up, and vote!

In the Spotlight this week, New York City tax revenues: March to April revenues fell $1.15 billion (3.5%) from the same period a year ago. Hotel tax, sales tax, income tax, and real estate transaction taxes are all down, partially offset by rising business and property taxes.

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. 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.

Sincerely,

Scott M. Stringer

The Economy

National Indicators

• New confirmed Covid-19 cases are on the rise again, with over 56,000 new cases confirmed in the United States on October 8^th, up from 25 to 30 thousand cases per day in early September. Confirmed U.S. cases peaked at over 70,000 daily in July.
• With the change of seasons, the South gets a break from indoor air-conditioning, but cooler temperatures in the North make for more time spent indoors. Wisconsin is among the highest the nation with roughly 43 confirmed cases per 100,000 population on October 8th, approaching levels of New York in April, and Florida in July (Chart 1). Dakotas are actually higher, but with far fewer cases.
• New York cases are climbing again, driven by hotspots in Rockland County, Brooklyn and Queens. Despite the recent rise, New York State has only about 7 daily cases per 100,000 population as of October 8^th.

Chart 1

SOURCE: New York Times, Covid-19 repository

• Initial U.S. unemployment claims fell to 840,000 for the week ending October 3rd, down from 849,000 the week prior (Chart 2). Initial claims for the prior week were also revised up to 849,000 from the previously reported 837,000. Initial claims remain persistently high, although there is concern that this does not entirely reflect new job losses, but to some extent lags in processing old claims, improperly classified claims, and other irregularities.
• Continuing claims fell by over 1 million, to 10,976,000 for the week of September 26th, down from 11,979,000 the week prior.

Chart 2

SOURCE: U.S. DOL

• Continuing claims for Pandemic Unemployment Assistance (PUA) fell to 11,394,832 from 11,828,338 the week prior (Chart 3), a decline of 433,306. PUA, enacted as part of the CARES Act, covers workers who are typically not eligible for state unemployment benefits, including the self-employed, and those with poorly documented income, who are unable to work due to COVID-19.
• Regular and PUA continuing claims together covered 23,017,133 unemployed Americans as of the week ending September 19^th (Chart 3).

Chart 3

SOURCE: U.S. DOL

New York City

• Initial unemployment claims by New York City residents remained roughly unchanged at 39,101 for the week of October 3rd, compared to 39,040 the week prior (Chart 4). As with the national data, there is concern persistently high initial claims do not necessarily reflect new job losses, but to some extent administrative issues.

Chart 4

SOURCE: NY DOL

Transportation

MTA Ridership

• Since the week ending September 25^th, average weekday subway ridership has been roughly 1.7 million daily riders. MTA bus ridership has similarly remained steady for the past few weeks at just under an average of 1.1 million weekday riders. (Chart 5)
• As of Wednesday, October 7^th, subway ridership was 64% below last year and bus ridership was 43% below.

Chart 5

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

NOTE: Excludes holidays.  Figures for the week ending October 9 include data through Wednesday, October 7.

Airports

• Travel restrictions and safety concerns severely curtailed air travel in the New York City region during the early stages of the pandemic. (Chart 6)
• While domestic travel has improved slightly since the spring, the city’s regional airports served fewer than 1.4 million domestic passengers and 371,461 international passengers in July, far below the 8.0 million domestic and 5.0 million international travelers last July.

Chart 6

SOURCE: Port Authority of New York and New Jersey, Airport Traffic Statistics.

NOTE: Includes John F. Kennedy International, Newark Liberty International, LaGuardia, Stewart International, and Teterboro Airports.

City Finances

COVID-19 Spending

• As of October 7^th, preliminary data for the close of FY 2020 shows the City has accrued $2.62 billion of COVID related expenditures. The FY 2020 expenditures are $1.39 billion below the June modification estimates, due to the roll-out of much of COVID spending into FY 2021.
• While the FY 2021 Budget assumed only $118 million of COVID related spending, through October 7^th, the City has committed to $1.92 billion of COVID related spending. In total, the City has incurred or committed to $4.54 billion of COVID related spending, as shown in Table 1. Of this, $3.50 billion has been expended.

Table 1: COVID-19 Budget and Expenditures, FY 2020 and FY 2021

SOURCE: Office of the NYC 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-19 Contracts

• Through October 7th, the City has registered $4.05 billion in contracts to procure goods and services in response to the COVID pandemic (Table 2). Almost sixty percent of the contracts, $2.41 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, as shown in Table 2.

Table 2: Registered COVID-19 Contracts through 10-7-2020

SOURCE: Office of the NYC Comptroller from FMS.

NOTE: Includes only contracts with COVID budget codes.

Cash Position

• The City’s central treasury balance (funds available for expenditure) stood at $7.90 billion as of Wednesday, October 7. At the same time last year, the City had $6.73 billion (Chart 7).
• The Comptroller’s Office’s review of the City’s cash position during the second quarter and projections for cash balances through December 31st, 2020, are available here.

Chart 7

SOURCE: Office of the NYC Comptroller

Spotlight of the Week

New York City Tax Revenues

As noted in previous weekly reports, the shutdown of all non-essential businesses in the City nearly seven months ago, and the limited reopening since then, have sharply lowered city tax revenues. Although some sectors of the economy have started to recover, the impact of the pandemic on other sectors shows little sign of abating.

In the six-month period from March through August, total City tax revenue declined by $1.15 billion or 3.5 percent compared to the same period a year ago (Table S.1). A 3.9% increase in the city’s property tax – the City’s largest single tax source – was offset by a decline of 10.4% in all other taxes. Given the lagged nature of changes in assessments the impact of the pandemic on property taxes will likely only occur in future years.

Table S.1 NYC Tax Collections 2020 vs 2019   March-August

SOURCE: NYC Comptroller’s Office calculations based on data provided by NYC OMB.  Data is preliminary and subject to revisions

By dollar amount, the sales tax accounted for the largest year-over-year decline, falling $918 million, or 23 percent. However, real estate transaction taxes (the Real Property Transfer and Mortgage Recording taxes) and the hotel occupancy tax had the largest percentage declines: 41.5 % and 52.9%, respectively. Combined, these tax sources fell by almost $660 million compared to the previous year.

Personal income taxes declined by nearly $500 million, or just over 7 percent. This decline comes primarily from lower income tax withholding from employees’ paychecks. Other personal income tax payments related to capital gains realizations were also lower compared to the previous year but account for a smaller portion of total personal income taxes.

Business taxes (General Corporation Tax and Unincorporated Business Tax) were higher during the March – August period compared to the prior year. As with personal income taxes, the final liability for business and personal income tax filers that will be due on April 15th, 2021 is highly uncertain. However, the strong performance of the stock markets and Wall Street firms has so far defied most expectations at the onset of the pandemic and the experience of prior recessions.

Finally, “other taxes” were also higher compared to the previous year, reflecting higher PILOTS (Payments in Lieu of Taxes) made by the Hudson Yards Infrastructure Corporation.

The City’s $1.1 billion revenue loss is significant, and while there have been signs of losses stabilizing for some taxes (sales tax losses, for instance, have been more muted compared to the early months of the pandemic), this decelerating trend has not been uniform across all taxes and monthly revenue losses continue to cumulate. Overall, however, the loss in revenue has been more contained than initially expected. For the fiscal year just ended in June, tax revenues exceeded both our Office’s and the City’s projections by about $1 billion.