New York City’s independent budget office (IBO) thinks that Gotham will take in $1.3 billion more than the mayor is projecting over the rest of this fiscal year and next. The extra cash will alleviate some pressure on the city’s projected $4.1 billion deficit (itself already revised downward once from $4.9 billion by the mayor’s own budget office).
Whence the new money?
IBO notes that Wall Street may earn a “staggering” $58.9 billion profit for calendar year 2009, followed by “healthy” profits of $16.2 billion next year. It attributes the turnaround to “reduced interest expenses resulting from interest costs near historic lows, various forms of Federal Reserve backing for financial firms’ securities and loans, the field of competitors reduced, and workforce and other operating costs down.”
Better bonuses mean that personal income in the city likely won’t fall as much as thought.
In May, IBO had projected a 2.9 percent drop in personal income for this year, followed by a dead-cat bounce of 0.9 percent next year. Now, it projects a drop of just a third of a percentage point drop this year and an identical drop next year.
Personal-income can hold its own only because of all of those federal guarantees of Wall Street. Although the securities industry likely will have lost 40,700 jobs by the time this is all over — more than one-fifth of its jobs — “Wall Street bonuses at the end of this year are expected to nearly equal the income lost” from all of the city’s 84,100 2009 job losses.
You may also like
Budget Update Paints Less Alarming Picture of Federal Health Cuts
A new fiscal report from the state Budget Division suggests federal funding cuts will hit New York's health-care budget less severely than officials have previously warned.
A relea Read More
Parsing the Impact of Mamdani’s Tax Hike Plans
The front-running candidate for New York City mayor, Zohran Mamdani, has said he can finance his costly campaign promises – including free buses and universal child care – by taxing only a sliver of the city's residents Read More
How Immigrants Became a Cash Cow for New York’s Essential Plan
The Hochul administration's move to shrink the Essential Plan in response to federal budget cuts has exposed a surprising reality:
For the past decade, immigrants have been a cash c Read More
How Washington’s Budget Bill Will Affect Health Care in New York
UPDATE: The final version of the federal budget bill omitted a handful of provisions that had been included in earlier drafts. One would have penalized states that use their own money to provide coverage for undocumente Read More
Two Dozen School Districts Are Returning to the Polls for Budget Revotes
Voters in 24 New York school districts return to the polls on Tuesday for school budget revotes. Last month, voters in 96 percent of school districts outside New York City conducting votes approved their school budgets for the upcoming year.
The 683 sc Read More
New York’s Proposed ‘MCO Tax’ Would Generate a Fraction of What Lawmakers Expected
The Hochul administration's proposed "MCO tax" would generate far less than the $4 billion in extra federal aid anticipated by state lawmakers when they approved the concept this spring, according to documents obtained by t Read More
How 1199 Earns its Reputation as Albany’s No. 1 Labor Power Broker
For the fourth time in six years, the president of New York's largest health-care union, George Gresham of 1199SEIU, has won the top spot on the "Labor Power 100" list from City &am Read More
New York Runs Away from the Pack on Medicaid Spending
New York's per capita Medicaid spending jumped 14 percent in 2023, moving it further ahead of the rest of the country, recently released nationwide data show.
In the federal fiscal year that ended last September, New York spent $94.6 billion Read More