City Comptroller Bill Thompson came out with some deteriorating financial and fiscal estimates today. On jobs, the comptroller’s chief economist, Frank Braconi, writes:
Our current forecast anticipates that as many as 165,000 private-sector jobs will be lost throughout the city’s economy over the next 24 months, which compares to a forecast of 85,000 jobs lost in the Comptroller’s most recent budget report, issued in July. We now believe that as many as 35,000 of those job losses may come in the financial services industry; our previous forecast was that the industry would contract by 25,000 jobs. The differences reflect the spreading of the economic troubles to other industry sectors as the nation slips into a general recession.
It’s quite possible, though, that if the city is underestimating how low Wall Street bonuses will be, it is also underestimating job losses. Each Wall Street job supports up to additional jobs in the city, largely through the free spending of bonus income. In May, the city’s budget office estimated that bonuses would decline by 27.8 percent; it has not updated that figure yet. In his latest comment on the matter, the comptroller did not quibble with the mayor’s estimate.
Further, bankers who do not expect a big payday in future years may hoard their paltry bonuses this year, changing the spending behavior on which the city depends.
On tax revenues, Braconi writes:
[Our] most recent revenue forecast, released in July, anticipated that the city’s tax revenues would decline by about $2.4 billion, or 6.2%, in the current fiscal year compared to FY 2008. That forecast, unfortunately, looks like it will have to be downgraded.”
The official tax-revenue estimate comes out in November.