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

Read the Comptroller’s testimony and report on the FY 21 Executive Budget.

The Economy

National Indicators

• Weekly initial claims for unemployment continued to decline as the economy has begun to reopen, dropping to 1.54 million for the week ending June 6 (Chart 1). Continuing claims, which represent the total number of persons receiving benefits, totaled 20.9 million for the week ending May 30^th – a figure which has been roughly flat since peaking at 24.9 million in early May.

Chart 1

• The Department of Labor separately reports claims for Pandemic Unemployment Assistance (PUA), enacted as part of the CARES Act for workers, mainly self-employed, who are typically not eligible for state unemployment benefits. Initial PUA claims totaled 705,676 for the most recent week. For the week ending May 23^rd there were 9.7 million continuing PUA claims.

New York City

• Initial unemployment claims by New York City residents were flat for the week ending June 6^th, at 48,362, compared to 43,703 for the preceding week (Chart 2). Since the COVID-19 pandemic led to the shutdown of nonessential businesses, 1.24 million New York City residents have applied for unemployment.

Chart 2

SOURCE: NYS DOL

City Finances

Non-Tax Revenues

Through February, revenues from charges for services, investment income, licenses, permits, franchises, fines, forfeitures and rental income in FY 2020 were a combined 5 percent above the previous year level. However, over the next three months, as the State imposed a lockdown on businesses and government in response to the pandemic, these revenues fell by nearly $300 million on a year-over-over basis, as shown in Table 1.

Table 1

SOURCE: Office of the Comptroller analysis of NYC FMS data.

The decline reflects the slowdown in local economic activity, lower demand for non-essential services and reduced enforcement due to business lockdowns.

The drop in investment income reflects the emergency rate cuts by the Federal Reserve in response to the downturn in the economy precipitated by the COVID-19 pandemic.

As a result of the sharp decline over the last three months, revenues from these sources for the current fiscal through May are 6 percent below the same period last year, a drop of about $190 million.

COVID Spending

The authorized budget for COVID-related spending is $2.623 billion for FY 2020 (Table 2). 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, $250 million for uniformed agencies overtime, and $131 million in the Department of Small Business Services, of which $81 million is budgeted for loan and grant programs.

Of this total, $2.57 billion has been committed – that is, the City has incurred obligations for that amount – and $995 million has been expended as of June 11.  Medical, surgical and lab supplies account for $1.29 billion of the commitments.

Table 2: COVID19 Budget and Expenditures, FY 2020

SOURCE: Office of the Comptroller analysis of NYC FMS data.

COVID Contracts

Through June 11, the City has registered nearly $3 billion in contracts to procure goods and services in response to the COVID pandemic (Table 3). Almost a third of the contracts, $926 million, are for the procurement of personal protective equipment (PPE). Other significant contracts include $505 million for medical staffing for COVID-19, food related contracts for $448 million, $348 million for hotels, $155 million for ventilators and $100 million for testing centers, as shown in Table 3.

Table 3: Registered COVID Contracts through 6-11-2020

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 $5.988 billion as of Thursday, June 11.  At the same time last year, the City had $7.176 billion. (Chart 3).

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 3

Spotlight of the Week

Food Insecurity During the Pandemic

Since the COVID-19 pandemic’s outbreak, the need for food assistance has soared. An April study by Hunger Free America found that 38 percent of New York City parents had skipped meals or reduced meal sizes for their children in the last month because they did not have enough money, more than double the rate in the last few years.  At the same time, schools and senior centers that had consistently provided meals shut down, the cost of groceries increased, and the number of emergency food providers contracted as social distancing orders disrupted operations. The Food Bank for New York City reported that 38 percent of soup kitchens and food pantries in its network had closed by mid-April, including 50 percent of its Bronx locations, resulting in long lines for food assistance.

Demand for assistance through the Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps,” has also climbed. In April the number of New York City residents benefiting from SNAP rose by nearly 5 percent to 1.55 million people from the prior month, sharply reversing steady declines since 2013.  In mid-May, the City reported that applications for SNAP had tripled since the third week in March.

NYC SNAP

SOURCE: New York City Human Resources Administration.

To help meet demand, the City has procured $448 million in emergency food contracts (Table 4). The federal Families First Coronavirus Response Act, enacted on March 18, also provided some relief by offering states options to ease SNAP administration and provide the maximum benefit to all participants. States may also provide school meal replacement benefits through the Pandemic EBT (Electronic Benefit Transfer) program, which will soon provide about $420 per child to the families of 1 million New York City school children. Further expansions to SNAP are under discussion as Congress debates additional stimulus measures, including a 15 percent boost to benefits, as proposed by the House in the HEROES Act.

Table 4

SOURCE:  Office of the Comptroller; FISA.