Pedestrians pass closed stores on Roosevelt Avenue in Queens. | AP Photo
NEW YORK — The coronavirus pandemic could plunge New York City into the worst economic crisis since the 1970s, costing the city 475,000 jobs and nearly $10 billion in revenue, a budget watchdog found.
According to a new report from the Independent Budget Office, the local economy is expected to lose 475,000 jobs over the next 12 months. That would lead to a shortfall of $9.7 billion in tax revenue in 2020 and 2021, compared to previous projections.
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Mayor Bill de Blasio agreed with the dire forecast in remarks Wednesday.
“We’re going to lose much more after that,” he told reporters. “This is going to get tougher.”
De Blasio warned that the city will be unable to maintain basic services without federal help.
“There’s no way to balance this budget with cuts alone. It’s impossible. Unless we’re talking about not providing basic services to New Yorkers, and if we’re not providing basic services, then you can kiss your recovery goodbye,” he said.
A recession with 475,000 lost jobs would be the worst the city has faced since the 1970s, according to the IBO report, and the drops in expected revenue are also the worst since the end of the city’s fiscal crisis.
The budget watchdogs expect a drop of $2.9 billion in revenue in the 2020 fiscal year and $6.7 billion in the 2021 fiscal year, which begins in July. Those dips represent 4.6 percent and 10.5 percent of expected revenue respectively.
“Damage from the pandemic is particularly intense in New York City because the city’s economy relies heavily on industries that have been largely shut down in order to limit the spread of the coronavirus,” the report says.
Retail employment is expected to take the biggest hit, with 100,000 jobs lost. Another 86,000 hotel and restaurant jobs could be lost, along with 26,000 jobs in the arts, entertainment and recreation.
Low- and middle-income jobs are the most likely to be lost, though some losses are expected in the financial industry as well. The only major sector to be spared job losses is health care, according to the report.
Sales tax revenue is expected to fall by $1.1 billion in 2020 and $3.1 billion in 2021 compared to previous estimates. Those losses come largely from retail stores not selling food and leisure and hospitality businesses, which are shut down.
As New Yorkers lose their paychecks, personal income tax collections are likely to drop by $1.4 billion in 2020, followed by shortfalls of $1.2 billion in 2021.
With hotels sitting empty, hotel tax collections are predicted to fall by $127 million in 2020 and $530 million in 2021.
Property tax revenue, less affected by the public health crisis, is not in for as big of a hit.
De Blasio has ordered $1.3 billion in cuts, a plan that has both drawn criticism from advocates for the programs that were slashed and from fiscal watchdogs for not cutting enough.
The city government is only set to receive $1.3 billion from the recently-passed federal stimulus. De Blasio said Congress should pass a new stimulus with more aid for local governments.
“We are the financial capital. We’re one of the economic engines of the nation. If we can’t provide basic services to our people, if this city can’t function, there will not be a recovery for everyone else,” he said.
He pleaded with President Donald Trump to help the city get a better deal.
“You and I remember the famous headline, back during the fiscal crisis, ‘Ford to City: Drop dead,’” de Blasio said, referencing an iconic New York Daily News front page. “Well, it’s Donald Trump’s time to decide what kind of headline he wants.”
NYC projected to lose at least 475,000 jobs and $9.7 billion in tax revenue
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