New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

Dear New Yorkers,

U.S. employment rose by over half a million in May, and the economic data point to a continuing New York City recovery, with May income tax revenues in the City coming in $1.4 billion higher than expected.

In the Spotlight this week – the Biden budget, and the many ways the federal aid will help address New York City needs.

Until next week —  let’s rediscover the New York we love!

Sincerely,

Scott M. Stringer

The Economy

National Indicators

• The U.S. economic recovery continued in May with seasonally adjusted nonfarm employment rising 559,000 to 144,894,000 (Chart 1), as the U.S. seasonally adjusted unemployment rate fell to 5.8%, from 6.1% in April.
• May figures for New York City will be available June 17^th.

Chart 1

SOURCE: U.S. Bureau of Labor Statistics via FRED

• Initial U.S. unemployment claims fell to a seasonally adjusted 385,000 for the week of May 29^th, down from a revised 405,000 the week prior (Chart 2). It was the fifth straight weekly decline.

Chart 2

SOURCE: U.S. Dept. of Labor

• Continuing unemployment insurance claims, including pandemic programs PEUC and PUA, together covered 15,143,446 unemployed Americans as of the week ending May 15^th, down from 15,378,643 the week prior (Chart 3).
• Recipients of Pandemic Emergency Unemployment Compensation (PEUC) rose to 5,293,842 for the week of May 15^th, up from 5,191,642 the week prior.
• Continuing claims for Pandemic Unemployment Assistance (PUA) fell to 6,368,301, down from 6,515,657 the week prior.

 Chart 3

SOURCE: U.S. Dept. of Labor, PEUC provides extended benefits to unemployed workers whose 26 weeks of regular unemployment benefits have run out. PUA covers workers who are typically not eligible for state unemployment benefits, including the self-employed and those with poorly documented income, or who are unable to work due to COVID-19. Both were enacted as part of the CARES Act and extended by the American Rescue Plan Act.

New York City

COVID

• The New York City pace of vaccination continues to slow with only 52% of residents having received at least one dose as of June 4^th.
• Daily vaccine first doses administered in New York City fell to a 7-day average of 8,995 on June 3^rd, down from a mid-May surge coinciding with the FDA’s approval of Pfizer’s vaccine for use in younger teens (Chart 4).
• Second doses administered fell to a 7-day average of 11,731 on June 3^rd, but should rebound as teens get their second dose.
• Administration of J&J’s single-dose vaccine never recovered from the April pause for safety review.

Chart 4

SOURCE: NYC DOHMH

The Economy

• Weekly new business license applications to New York City’s Department of Consumer Affairs (DCA) rose to 247 the week of May 27^th, up from 204 the week prior (Chart 5). Business license applications are approaching pre-pandemic levels for the first time.

Chart 5

SOURCE: New York City Department of Consumer Affairs (now called the Department of Consumer and Worker Protection) via NYC OpenData

• The Share of employed New York City residents working from home due to COVID fell to 33% in April 2021, a 6 percentage point decline from March (Chart 6). City residents continue to work from home at higher rates than New York State and U.S. residents.

Chart 6

SOURCE: Current Population Survey, COVID Supplement

• Google Mobility data suggest New York City residents are returning to shopping and transit more quickly than they are to workplaces. As of May 29^th, time spend at workplaces was down 34.9% from pre-pandemic levels, but recovering slowly from being down 37% in April, 39% in March, and as much as 44% in February (Chart 7).

Chart 7

SOURCE: Google COVID-19 Community Mobility Reports, via Tracktherecovery.org

MTA Subway and Bus Ridership

• Subway ridership continues to slowly grow, reaching a weekday average of 2.3 million in the most recent week, an increase of 1.9% from the week prior (Chart 8).
• As of Wednesday, June 3, 2021, ridership was down 59% on the subway and 49% on MTA buses, compared to pre-pandemic norms.

Chart 8

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

NOTE: Excludes federal holidays. Data presentation differs from prior versions of the ridership chart. The presentation has been adjusted to reflect weekly data through Wednesday of each week.

Air Travel

• More passengers are traveling through New York City airports, even though the pace of recovery continues to lag the nation (Chart 9).
• As of April 2021, airport passenger volume was 63% below pre-pandemic levels at airports in the New York City region, compared to a decline of 41% nationwide.

Chart 9

SOURCE: Office of the NYC Comptroller analysis of data released by the Port Authority of New York and New Jersey and the U.S. Transportation Security Administration.

NOTE: New York City airports include John F. Kennedy International, Newark Liberty International, LaGuardia and Stewart International.

City Finances

• New York personal income tax collections in May 2021 were more than $1.4 billion higher than the City’s recent April projections (not shown), and are on pace to exceed the City’s pre-pandemic January 2020 projections by $944 million in fiscal year 2021 (Table 1).
• The decline in personal income tax revenues predicted by most forecasters at the beginning of the pandemic has not occurred. Year-over-year personal income tax revenues are now projected to grow by $1.2 billion, or 8.9%, in fiscal year 2021.

Table 1: Projected New York City Personal Income Tax Revenue, by Budget Period ($ Millions)

SOURCE: NYS Dept of Taxation and Finance, NYC OMB

Cash Position

• The City’s central treasury balance (funds available for expenditure) stood at $9.26 billion as of Wednesday, June 2^nd. At the same time last year, the City had $5.18 billion (Chart 10).
• The Comptroller’s Office’s review of the City’s cash position during the third quarter of FY 2021 and projections for cash balances through September 30^th, 2021, are available here.

Chart 10

SOURCE: Office of the NYC Comptroller.

Spotlight

The Biden Budget

The first budget of the Biden administration offered a sharp departure from the fiscal priorities of his predecessor. Four years ago, President Trump proposed to dismantle the safety net and cut more than $850 million in direct aid to New York City. In contrast, Biden’s plan would more than double Title I grants for disadvantaged students, expand Section 8 housing vouchers to an additional 200,000 families, provide affordable child care to all low- and middle-income families, invest in clean energy and climate resiliency, and modernize the nation’s infrastructure. Under the $6.0 trillion plan for federal fiscal year 2022, non-defense discretionary spending would rise by 16% over current funding levels while defense spending would increase by 1.7%.

New York City currently assumes that the City will receive $13.6 billion in direct federal funding in FY 2022, including $6.5 billion in covid relief and $7.1 billion in other federal aid (Table S.1). One of the most substantial impacts to the City budget could come from Biden’s proposal to fund $36.5 billion in Title I grants by adding $20 billion for Title I Equity Grants. Currently, New York City expects to receive $679 million in Title I funds in FY 2022. The City could also benefit from proposals to expand the Child Care and Development Block Grant by $1.5 billion and Head Start programs by $1.2 billion to expand access to quality, affordable child care.

Table S.1: Projected Federal Funds in the New York City Financial Plan ($ millions)

SOURCE: Office of the New York City Comptroller analysis of the Office of Management and Budget FY 2022 Executive Budget (April 2021).

Funding expansions would be partially offset by raising the corporate tax rate from 21% to 28%, increasing the tax rate on capital gains and dividends, and adopting a global corporate minimum tax, among other measures. To the extent that taxpayer income exceeds $1 million, long-term capital gains and qualified dividends would be taxed at ordinary income tax rates, bringing the top rate to 39.6% plus the 3.8% net investment tax, retroactive to the “date of announcement.” The budget would also boost low-income housing tax credits and extend previously adopted temporary credits, including expansions of the Child Tax Credit, the Earned Income Tax Credit, and health insurance tax subsidies.

Since releasing the budget, President Biden has backed away from increasing the corporate tax rate, and federal lawmakers are likely to negotiate other changes to the budget before the new fiscal year begins on October 1.