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 has been put on hold in order to protect lives and “flatten the curve.” The shutdown has resulted in mass layoffs and lost income for hundreds of thousands of New Yorkers, and a dramatic drop in tax revenues that blew a hole in the Fiscal Year 2021 budget proposed by Mayor de Blasio in January.  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 testimony and report on the FY 21 Executive Budget.

The Economy

National Indicators

The U.S. economy continues to suffer the worst economic downturn since the Great Depression.

• The number of initial unemployment claims nationally fell to 2.123 million for the week ending May 23, from 2.446 million the prior week (Chart 1). Over 41 million Americans have filed initial unemployment claims since mid-March – roughly one-quarter of the workforce.
• Continuing unemployment claims fell to 21.052 million from 25.073 the previous week. Some of this may be due to biweekly claim filing in California (last week was an “off” week), but the drop is at least partially attributable to re-hiring as some states and sub-state regions begin to re-open.
• The U.S. Bureau of Economic Analysis revised its estimate of first quarter Gross Domestic Product to -5% (annual rate) — slightly worse than the initial estimated decline of 4.8%.

Chart 1

New York City

• The NYC unemployment rate in April was 14.6% (Chart 2). The citywide rate was 3.7% in April 2019.  The April 2020 rate ranged from a high of 16.5% in the Bronx to a low of 10.9% in Manhattan.

Chart 2

• Initial unemployment claims by New York City residents peaked at 184,525 during the week ending April 11^th and have since flattened out at an average of 104,000 new claims per week (Chart 3). Since the COVID-19 pandemic led to the shutdown of nonessential businesses, over 1.1 million New York City residents have applied for unemployment.

Chart 3

• Real estate transactions volume fell by over 40 percent in March and April compared to the same months last year (Chart 4). Residential transactions totaled 4,517, compared to 7,607 in 2019, while commercial transactions fell by nearly 50%, to 369 from 722 in 2019. The numbers of both residential and commercial transactions were below their 2009 levels: by 13% for residential and 42% for commercial.

Chart 4

• Applications for building permits, for both new construction and alterations, fell roughly 70 percent between the week ending March 14^th, when broad shutdowns began, and the week ending May 2^nd (Chart 5). In the week ending May 9^th activity picked up by over 60%, led by a 174% increase in new construction permits.

Chart 5

City Finances

Tax Revenues

• City tax revenues for the year through April totaled $55.9 billion, up $856 million, or 1.6% compared to the same time last year (Table 1).
• The real property tax buoyed collections, rising 6.8%, or $1.9 billion, compared to 2019.
• All other taxes combined were down $1.03 billion, or 3.8% relative to FY 2019.
• Deferral of the filing deadline from April 15^th to July 15^th is the principal reason for the year-over-year decline in personal income tax revenues.

Table 1: Tax Revenues Fiscal Year-to-Date through April, FY 2019 and FY 2020

SOURCE: Office of the Comptroller, Office of Management and Budget.

NOTES: ^*General Corporation, Banking Corporation, and Unincorporated Business Taxes.  ^**Real Property Transfer, Mortgage Recording, and Commercial Rent Taxes.

• On May 26^th, the Mayor provided the final revenue estimate to be used for adoption of the FY 2021 budget to the City Council. The update revised the estimated tax shortfall for FY 2021 from $5.4 billion to $6.9 billion, relative to the Preliminary Budget – a nearly 11% drop in estimated tax revenues (Table 2).
• Property tax revenues are now projected to be $321 million, or 1.0% lower than estimated in January. But all other tax revenues are down $6.6 billion, or 19.6%, compared to the January Preliminary Budget forecast.
• The Mayor did not present a plan to address the additional $1.6 billion budget gap for FY 2021.

Table 2: Final FY 2021 Tax Revenue and City Funds Projection

SOURCE: Office of the Comptroller, Office of Management and Budget.

COVID Spending and Federal Funding

The authorized budget for COVID-related spending is $2.623 billion for FY 2020 (Table 3). More than half of this spending, $1.42 billion, is for medical, surgical and lab supplies. Other significant COVID-related spending includes $246 million for NYC Health+Hospitals, $379 million for COVID-19 response in the Department of Emergency Management, and $250 million for uniformed agencies overtime.

Of this total, $2.31 billion has been committed – that is, the City has incurred contractual obligations for that amount – and $630 million has been expended as of May 27.  Medical, surgical and lab supplies account for $1.24 billion of the commitments.

Table 3: COVID19 Budget and Expenditures, FY 2020

SOURCE: Office of the Comptroller from FMS.

Cash Position

The City’s central treasury balance (funds available for expenditure) stood at $4.129 billion as of Thursday, May 28.  At the same time last year, the City had $6.309 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 6

Spotlight of the Week

The 2020 Census

The 2020 census got underway in the midst of the COVID-19 pandemic.  The census, conducted every ten years as required by the U.S. Constitution, is the basis for the apportionment of seats in the House of Representatives, as well as forming the basis for the allocation of federal grant aid.  As much as $5.8 billion in federal program revenues are allocated to New York City’s budget each year based on census-derived formulas. These funds support school lunches, Head Start, winter heating assistance, transportation improvements, and more.

Census forms were mailed beginning March 12^th – just as business shutdowns and stay-at-home orders were beginning to take effect across most states.  Households are encouraged to respond to their census form online, or by mail or telephone.

As of May 30^th, New York State was lagging the national self-response rate, at 55.5% vs. 60.4% nationally.  New York’s internet self-response rate was 44.6%, vs. 48.6% nationally.

New York City’s self-response rate was even further behind the statewide average, at 50.8%, with a 40.8% internet response rate.  Borough-level response rates varied from a low of 48.1% in Brooklyn to a high of 56.8% in Staten Island.

SOURCE: https://2020census.gov/en/response-rates.html

The internet self-response rate lagged the nation in every borough. The largest mail and phone self-response rate has been in the Bronx (17.2%) and the smallest in Manhattan (6.2%).  As the Comptroller’s office has pointed out, nearly one-third of New Yorkers lack access to broadband internet at home – and that number reaches as high as 50% in some communities. Households lacking internet access are more likely to be people of color, impoverished, less educated, outside of the labor force, or elderly.  Comptroller Stringer has urged a number of robust outreach measures to ensure that the digital Census does not undercount populations within New York City that are most in need of accurate representation.

Read Census and the City: Overcoming NYC’s Digital Divide in the 2020 Census.