The State of the City's Economy and Finances (December 2020) — Office of the New York City Comptroller
Summary
The State of the City's Economy and Finances, a report by the Bureau of Budget of the Office of the New York City Comptroller, Scott M. Stringer, dated December 15, 2020. The report reviews U.S. and New York City economic performance in 2020 and analyzes the City's November Plan, covering revenues, federal and state aid, expenditures including COVID-19 spending, and the capital budget and financing program. It states that the November Plan increased the FY 2021 budget by $3.83 billion to $92.02 billion, driven largely by $1.48 billion in FEMA COVID-19 grants and $1.43 billion in CARES Act funding. The Comptroller's Office identifies risks to the budget ranging from $128 million in FY 2021 to $3.04 billion in FY 2024, citing $1 billion of unspecified labor savings as the greatest risk. Appendix tables detail plan revenues and expenditures.
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Bureau of Budget
December 15, 2020
The State of the City’s Economy
and Finances
1 Centre Street, New York, NY 10007 • (212) 669-3500 • www.comptroller.nyc.gov • @NYCComptroller
Office of the New York City Comptroller Scott M. Stringer 1
SCOTT M. STRINGER
Comptroller
Deputy Comptroller for Budget
Preston Niblack
Bureau Chief
Eng-Kai Tan
Project Coordinator
Manny Kwan
Director, Economic Research Director, Revenues
Andrew McWilliam Steven Giachetti
Director, Budget Research Director, Cash Analysis
Tammy Gamerman Irina Livshits
Staff
Kettly Bastien Michael Hecht
Rosa Charles Dahong Huang
Stephen Corson Marcia Murphy
Selcuk Eren Andrew Rosenthal
Peter E. Flynn Orlando Vasquez
Michele Griffin
Table of Contents
I. EXECUTIVE SUMMARY ....................................................................................................................... v
II. THE STATE OF THE CITY’S ECONOMY ................................................................................................. 5
U.S. ECONOMIC PERFORMANCE IN 2020 ............................................................................................................ 5
NEW YORK CITY’S ECONOMIC PERFORMANCE IN 2020 .......................................................................................... 6
The Economic Outlook ............................................................................................................................ 9
The Shape of Recovery .......................................................................................................................... 10
III. THE NOVEMBER 2020 FINANCIAL PLAN .......................................................................................... 13
Citywide Savings Program (CSP) ........................................................................................................... 14
The Outyears of the Plan ...................................................................................................................... 15
Risks and Offsets ................................................................................................................................... 16
REVENUE ANALYSIS........................................................................................................................................ 17
Tax Revenues: Revisions since the June 2020 Adopted Budget ............................................................ 17
Comptroller’s Projections...................................................................................................................... 18
Miscellaneous Revenues ....................................................................................................................... 22
FEDERAL AND STATE AID ................................................................................................................................. 23
EXPENDITURES ANALYSIS ................................................................................................................................ 24
COVID-19 Expenditures......................................................................................................................... 25
Headcount ............................................................................................................................................ 26
Overtime ............................................................................................................................................... 27
Health Insurance ................................................................................................................................... 28
Pensions ................................................................................................................................................ 29
Labor ..................................................................................................................................................... 29
Public Assistance................................................................................................................................... 30
Department of Education ..................................................................................................................... 31
Homeless Services ................................................................................................................................. 31
IV. CAPITAL BUDGET AND FINANCING PROGRAM ............................................................................... 33
V. APPENDIX....................................................................................................................................... 39
List of Tables
TABLE 1. FY 2021 – FY 2024 FINANCIAL PLAN ..................................................................................................... 1
TABLE 2. PLAN-TO-PLAN CHANGES NOVEMBER 2020 PLAN VS. JUNE 2020 PLAN ........................................................ 2
TABLE 3. RISKS AND OFFSETS TO THE NOVEMBER 2020 FINANCIAL PLAN .................................................................... 3
TABLE 4. NEW YORK CITY EMPLOYMENT CHANGES IN 2020 ..................................................................................... 7
TABLE 5. SELECTED ECONOMIC INDICATORS, ANNUAL AVERAGES, COMPTROLLER AND MAYOR'S FORECAST,
2020 TO 2024.................................................................................................................................. 12
TABLE 6. CHANGES TO FY 2021 CITY-FUNDS ESTIMATES FROM THE ADOPTED BUDGET .............................................. 13
TABLE 7. RISKS AND OFFSETS TO THE NOVEMBER 2020 FINANCIAL PLAN .................................................................. 16
TABLE 8. REVISIONS TO THE CITY’S TAX REVENUE ASSUMPTIONS JUNE 2020 VS. NOVEMBER 2020 ............................... 18
TABLE 9. TAX REVENUE FORECAST, GROWTH RATES .............................................................................................. 19
TABLE 10. COMPTROLLER’S OFFICE RISKS AND OFFSETS TO THE CITY’S TAX REVENUE PROJECTIONS ................................. 19
TABLE 11. CHANGES IN FY 2021 ESTIMATES JUNE 2020 VS. NOVEMBER 2020 .......................................................... 23
TABLE 12. FY 2021 – FY 2024 EXPENDITURE GROWTH ADJUSTED FOR PREPAYMENTS AND PRIOR-YEAR ACTIONS ............ 25
TABLE 13. FY 2021 COVID-19 BUDGET ALLOCATION BY PURPOSE .......................................................................... 25
TABLE 14. TOTAL FUNDED FULL-TIME YEAR-END HEADCOUNT PROJECTIONS NOVEMBER 2020 FINANCIAL PLAN .............. 26
TABLE 15. SEPTEMBER 30, 2020 HEADCOUNT VS. PLANNED JUNE 30, 2021 HEADCOUNT ........................................... 27
TABLE 16. PROJECTED FY 2021 OVERTIME SPENDING ............................................................................................ 28
TABLE 17. PAY-AS-YOU-GO HEALTH EXPENDITURES ............................................................................................... 29
TABLE 18. CHANGES TO CITY PENSION CONTRIBUTIONS........................................................................................... 29
TABLE 19. CITYWIDE HOMELESS SERVICES EXPENDITURES ........................................................................................ 32
TABLE 20. FY 2021 ADOPTED CAPITAL COMMITMENT PLAN ALL-FUNDS FY 2021 – FY 2024 ...................................... 33
TABLE 21. ACTUAL AND PLAN COMMITMENTS ....................................................................................................... 35
TABLE 22. NOVEMBER 2020 PLAN FINANCING PROGRAM ....................................................................................... 35
TABLE 23. NOVEMBER PLAN FINANCIAL PLAN DEBT SERVICE ESTIMATES .................................................................... 36
TABLE A1. NOVEMBER 2020 FINANCIAL PLAN REVENUE DETAIL ............................................................................... 39
TABLE A2. NOVEMBER 2020 FINANCIAL PLAN EXPENDITURE DETAIL ......................................................................... 41
ii The State of the City’s Economy and Finances
List of Charts
CHART 1. U.S. NONFARM EMPLOYMENT IN 2020 .................................................................................................... 5
CHART 2. CHANGE IN U.S. PERSONAL INCOME AND PERSONAL CONSUMPTION EXPENDITURES......................................... 6
CHART 3. NEW YORK CITY UNEMPLOYMENT RATES .................................................................................................. 8
CHART 4. NEW YORK CITY SMALL BUSINESS REVENUE ............................................................................................... 9
CHART 5. U.S. PERSONAL SAVINGS ...................................................................................................................... 11
CHART 6. COMBINED FY 2021 AND FY 2022 CITYWIDE SAVINGS PROGRAM .............................................................. 15
CHART 7. 2020 PUBLIC ASSISTANCE CASELOAD AND MONTHLY CHANGES .................................................................. 30
CHART 8. NYC DEBT SERVICE AS A PERCENT OF TAX REVENUES ................................................................................ 37
CHART 9. NYC DEBT SERVICE AS A PERCENT OF TOTAL REVENUES. ............................................................................ 38
Office of New York City Comptroller Scott M. Stringer iii
iv The State of the City’s Economy and Finances
I. Executive Summary
After falling at an annualized rate of 5.0 percent in the first quarter, and 31.4 percent in the second
quarter, U.S. Gross Domestic Product (GDP) roared back in the third quarter as state and cities
eased back on social and business restrictions that were imposed to combat the COVID-19
pandemic. But the recovery has been partial, leaving GDP still 3.5 percent below its level in the
fourth quarter of 2019, while just over half of jobs lost initially have returned. In the short term, the
economic outlook remains uncertain as rising infections and fatalities could lead to tightening of
state and local restrictions which had eased over the summer. In the longer term, the successful
roll-out and deployment of coronavirus vaccines should provide a boost to the economy by mid-
2021, and set the stage for recovery and renewed economic growth.
An accelerated and robust recovery would vastly improve the City’s fiscal outlook. Revenue and
expenditure projections in the November Plan released on November 23rd do not reflect any change
in economic outlook since June. Outyear tax revenue forecast in the Plan remains unchanged from
June, while City-funds spending projections in the outyears reflect primarily the phase-in of pension
investment return shortfall relative to the actuarial interest rate assumption of 7 percent, and
outyear savings from the November Plan Citywide Savings Program.
Revisions to the FY 2021 budget essentially reflect alignment with year-to-date experience. The
November Plan increased the FY 2021 budget by $3.83 billion to $92.02 billion. The bulk of the
increase is in the non-City-funds portion of the budget and is driven by increases of $1.48 billion in
FEMA COVID-19 grants, and $1.43 billion in CARES Act funding.
FY 2021 City-funds revenues were increased by $617 million to $64.32 million. The increase
primarily reflects higher-than-expected tax revenue collections through the first quarter of the fiscal
year. Through October, tax collections for the current fiscal year were $985 million more than
forecasted for this period in June.
FY 2021 City-funds agency spending is $740 million more than the Adopted Budget, driven by
spending for new needs, including $157 million for school reopening, and $113 million for the
COVID-19 emergency food program. The increase in City-funds agency spending is offset by
savings in the November Plan Citywide Savings Program, resulting in a net decrease in agency
spending of $15 million. The net reduction in City-funds agency spending together with the
$617 million increase in City-funds revenues allows the City to fund a FY 2021 Budget Stabilization
Account (BSA) of $632 million to prepay a portion of FY 2022 Transitional Finance Authority debt
service.
The Comptroller’s Office’s analysis of the November Plan shows risks to the budget ranging from
$128 million in FY 2021 to $3.04 billion in FY 2024. Risks to the Plan estimates stem from the
Comptroller’s Office’s higher expenditure estimates. In the first two years of the Plan, the
Comptroller’s Office’s higher tax revenue forecasts provide some offsets against these expenditure
risks. However, the Comptroller’s Office expects tax revenues to be lower than the City’s forecast
in the latter half of the Plan period, adding to the expenditure risks in these years.
The greatest risk to the Plan assumptions is the assumption of $1 billion of unspecified labor
savings in the outyears of the Plan. In FY 2021, the City credited $658 million in spending
reductions from furlough savings and deferrals of FY 2021 labor payments to the $1 billion savings,
leaving a residual risk of $342 million. Beyond the modest furlough savings, however, no recurring
savings have yet to be identified, and the City will need to address this risk in the January
preliminary budget for FY 2022.
Other risks or mitigation to risks not quantified in our analysis is the uncertainty of State and Federal
actions. The State budget assumes $8 billion in recurring local aid cuts but the allocation of these
Office of New York City Comptroller Scott M. Stringer v
cuts have yet to be determined. While President-elect Biden has pledged to provide states with
budget relief, it is not clear if Congress will approve such proposal. Federal budget relief for states
would obviate the need to implement some or all of the State reductions.
vi The State of the City’s Economy and Finances
Table 1. FY 2021 – FY 2024 Financial Plan
Change
FYs 2021 –2024
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 Dollar Percent
Revenues
Taxes:
General Property Tax $30,852 $32,001 $32,863 $33,226 $2,374 7.7%
Other Taxes 27,617 31,026 33,079 33,995 6,378 23.1%
Tax Audit Revenues 921 721 721 721 (200) (21.7%)
Subtotal: Taxes $59,390 $63,748 $66,663 $67,942 $8,552 14.4%
Miscellaneous Revenues 7,025 6,821 6,809 6,810 (215) (3.1%)
Less: Intra-City Revenues (2,038) (1,816) (1,812) (1,811) 227 (11.1%)
Disallowances Against Categorical Grants (15) (15) (15) (15) 0 0.0%
Subtotal: City-Funds $64,362 $68,738 $71,645 $72,926 $8,564 13.3%
Other Categorical Grants 1,065 998 988 986 (79) (7.4%)
Inter-Fund Revenues 696 654 656 656 (40) (5.7%)
Federal Categorical Grants 10,957 6,994 6,931 6,925 (4,032) (36.8%)
State Categorical Grants 14,942 16,285 16,732 16,781 1,839 12.3%
Total Revenues $92,022 $93,669 $96,952 $98,274 $6,252 6.8%
Expenditures
Personal Services
Salaries and Wages $29,397 $30,327 $30,504 $30,783 $1,386 4.7%
Pensions 9,932 10,566 10,538 10,310 378 3.8%
Fringe Benefits 11,142 11,572 12,237 13,041 1,899 17.0%
Retiree Health Benefits Trust (1,600) 0 0 0 1,600 (100.0%)
Subtotal-PS $48,871 $52,465 $53,279 $54,134 $5,263 10.8%
Other Than Personal Services
Medical Assistance $5,238 $5,915 $5,915 $5,915 $677 12.9%
Public Assistance 1,626 1,651 1,650 1,650 24 1.5%
All Other 34,740 30,904 31,167 31,412 (3,328) (9.6%)
Subtotal-OTPS $41,604 $38,470 $38,732 $38,977 ($2,627) (6.3%)
Debt Service
Principal $3,263 $3,896 $4,186 $4,074 $811 24.9%
Interest & Offsets 3,409 3,788 4,283 4,752 1,343 39.4%
Subtotal Debt Service $6,672 $7,684 $8,469 $8,826 $2,154 32.3%
FY 2020 BSA ($3,819) $0 $0 $0 $3,819 (100.0%)
FY 2021 BSA $632 ($632) $0 $0 ($632) (100.0%)
Capital Stabilization Reserve $0 $250 $250 $250 $250 NA
General Reserve $100 $1,000 $1,000 $1,000 $900 900.0%
Less: Intra-City Expenses ($2,038) ($1,816) ($1,812) ($1,811) $227 (11.1%)
Total Expenditures $92,022 $97,421 $99,918 $101,376 $9,354 10.2%
Gap To Be Closed $0 ($3,752) ($2,966) ($3,102) ($3,102) NA
NOTE: Numbers may not add to due to rounding.
Table 2. Plan-to-Plan Changes
November 2020 Plan vs. June 2020 Plan
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024
Revenues
Taxes:
General Property Tax $0 $0 $0 $0
Other Taxes 748 0 0 0
Tax Audit Revenues 0 0 0 0
Subtotal: Taxes $748 $0 $0 $0
Miscellaneous Revenues 65 (23) (20) (19)
Less: Intra-City Revenues (196) 21 22 23
Disallowances Against Categorical Grants 0 0 0 0
Subtotal: City-Funds $617 ($2) $2 $4
Other Categorical Grants 90 9 0 0
Inter-Fund Revenues 19 (21) (19) (19)
Federal Categorical Grants 3,587 28 9 8
State Categorical Grants (483) 1 (7) (7)
Total Revenues $3,830 $15 ($15) ($14)
Expenditures
Personal Services
Salaries and Wages ($352) $355 ($32) ($32)
Pensions 0 84 164 240
Fringe Benefits 577 116 (18) (19)
Retiree Health Benefits Trust 0 0 0 0
Subtotal-PS $225 $555 $114 $189
Other Than Personal Services
Medical Assistance $0 $0 $0 $0
Public Assistance (2) 0 0 0
All Other 3,869 (35) 14 13
Subtotal-OTPS $3,867 ($35) $14 $13
Debt Service
Principal ($455) ($72) $108 $7
Interest & Offsets (243) (250) (350) (326)
Subtotal Debt Service ($698) ($322) ($242) ($319)
FY 2020 BSA $0 $0 $0 $0
FY 2021 BSA $632 ($632) $0 $0
Capital Stabilization Reserve $0 $0 $0 $0
General Reserve $0 $0 $0 $0
Less: Intra-City Expenses ($196) $21 $22 $23
Total Expenditures $3,830 ($413) ($92) ($94)
Gap To Be Closed $0 $428 $77 $80
NOTE: Numbers may not add to due to rounding.
2 The State of the City’s Economy and Finances
Table 3. Risks and Offsets to the November 2020 Financial Plan
($ in millions, positive numbers decrease the gap and negative numbers increase the gap)
FY 2021 FY 2022 FY 2023 FY 2024
City Stated Gap $0 ($3,752) ($2,966) ($3,102)
Tax Revenues
Property Tax $0 ($62) ($978) ($1,617)
Personal Income Tax 283 306 324 285
Business Taxes 0 (164) (300) (160)
Sales Tax 18 59 142 229
Real Estate Transaction Taxes 144 289 (28) (155)
All Other 129 86 14 56
Audit 0 200 200 200
Total Tax Revenues $574 $714 ($626) ($1,162)
Expenditures
Overtime ($272) ($130) ($130) ($130)
Charter School Tuition 0 (154) (282) (433)
Carter Cases (150) (150) (150) (150)
Pupil Transportation 0 (75) (75) (75)
DOE Medicaid Reimbursement (20) (20) (20) (20)
Pre-K Special Education 50 50 50 50
Fair Fares 0 (100) (100) (100)
Homeless Shelters (68) (68) (68) (68)
Labor Savings (342) (1,000) (1,000) (1,000)
VRDB Interest Savings 100 100 75 50
Total Expenditures ($702) ($1,547) ($1,700) ($1,876)
Total (Risks)/Offsets ($128) ($833) ($2,326) ($3,038)
Restated (Gap)/Surplus ($128) ($4,585) ($5,292) ($6,140)
NOTE: Numbers may not add due to rounding.
Office of New York City Comptroller Scott M. Stringer 3
4 The State of the City’s Economy and Finances
II. The State of the City’s Economy
U.S. Economic Performance in 2020
In the first three quarters of 2020, U.S. real (inflation-adjusted) Gross Domestic Product (GDP) fell
at an annualized rate of 5.0 percent in the first quarter, 31.4 percent in the second quarter, and
rose 33.1 percent in the third quarter. These dramatic swings resulted in third quarter GDP roughly
3.5 percent below the fourth quarter of 2019.
With the onset of the pandemic, U.S. nonfarm employment fell from a peak of 152 million in
February to 130 million in April, a loss of roughly 22 million jobs, as the economy shut down.
Employment recovered quickly with reopening in subsequent months, and the economy added
2.7 million jobs in May, 4.8 million in June, and over 1 million in July and August. With COVID cases
resurging in the fall, states began taking greater measures against the spread, and employment
growth slowed. The U.S. added only 245,000 new jobs in November, and total employment
remained some 10 million jobs below the pre-pandemic level.
Chart 1. U.S. Nonfarm Employment in 2020
155
Nonfarm Employment in Millions
150
145
140
135
130
125
SOURCE: U.S. Bureau of Labor Statistics
Despite the massive job losses, personal income actually rose through the pandemic thanks to
programs such as regular unemployment insurance, Pandemic Unemployment Assistance (made
available to those ineligible for regular unemployment insurance) supplemental $600 weekly
unemployment insurance payments, and one-time stimulus payments made through the
$2.2 trillion CARES Act. Personal income peaked at a seasonally-adjusted annualized rate of
$21 trillion in April due to one-time stimulus payments. Incomes have since fallen, in part due to
the expiration of the $600 weekly supplemental unemployment insurance at the end of July.
Office of New York City Comptroller Scott M. Stringer 5
Chart 2. Change in U.S. Personal Income
and Personal Consumption Expenditures
Personal Incomes Personal Consumption Expenditures
115
110
105
Febraruy 2020 = 100
100
95
90
85
80
SOURCE: Federal Reserve Bank of St. Louis, FRED database
In contrast, personal consumption expenditures fell dramatically in April, as worried consumers
retrenched, cancelling travel plans, limiting major purchases, and staying home. Consumer
spending has since gradually recovered, but as of October is still 2 percent below pre-pandemic
levels.
New York City’s Economic Performance in 2020
The economic shutdown in response to the COVID pandemic brought unprecedented New York
City job losses. Over 890,000 jobs were lost between February and April. Job losses were
concentrated in lower-wage industries providing in-person goods and services to consumers:
hotels, restaurants, bars, spas, hair salons, and retail stores, as shown in Table 4. From February
to April, employment in leisure and hospitality declined by almost two-thirds, shedding over 302,000
jobs. Despite the pandemic, over 100,000 healthcare jobs were lost between February and April
as many people delayed healthcare visits out of caution, and hospitals cancelled elective surgeries.
6 The State of the City’s Economy and Finances
Table 4. New York City Employment Changes in 2020
Percent
Change, Change, Change,
Seasonally-Adjusted February April Feb-Apr October Apr-Oct. Feb-Oct.
Total Private 4,093.5 3,201.9 (891.57) 3,511.6 309.67 (14.2%)
Financial Activities 481.5 458.1 (23.43) 452.3 (5.82) (6.1%)
Finance and Insurance 345.3 338.3 (6.97) 328.3 (10.10) (4.9%)
Securities 179.9 177.3 (2.65) 170.8 (6.48) (5.1%)
Banking 105.6 101.7 (3.94) 100.4 (1.29) (5.0%)
Real Estate 136.2 119.7 (16.45) 124.0 4.28 (8.9%)
Information 211.7 198.9 (12.78) 203.6 4.66 (3.8%)
Professional and Business Services 808.8 693.5 (115.31) 704.8 11.34 (12.9%)
Prof., Scientific, and Technical Services 438.2 409.1 (29.15) 402.2 (6.84) (8.2%)
Mgmt. of Companies and Enterprises 77.5 70.7 (6.85) 69.9 (0.77) (9.8%)
Administrative Services 293.0 213.7 (79.31) 232.7 18.95 (20.6%)
Employment Services 130.5 100.3 (30.27) 110.5 10.25 (15.3%)
Education and Health Services 1,074.7 938.9 (135.80) 996.9 58.01 (7.2%)
Educational Services 246.7 215.0 (31.72) 219.5 4.49 (11.0%)
Health Care and Social Assistance 828.0 723.9 (104.08) 777.4 53.52 (6.1%)
Leisure and Hospitality 462.3 159.9 (302.38) 255.5 95.62 (44.7%)
Arts, Entertainment, and Recreation 90.3 33.6 (56.71) 32.7 (0.92) (63.8%)
Accommodation and Food Services 372.0 126.3 (245.67) 222.8 96.55 (40.1%)
Other Services 199.6 139.0 (60.65) 162.5 23.48 (18.6%)
Trade, Transportation, and Utilities 628.3 482.2 (146.10) 541.9 59.75 (13.7%)
Retail Trade 342.3 252.4 (89.93) 305.7 53.27 (10.7%)
Wholesale Trade 138.8 116.1 (22.72) 117.7 1.53 (15.3%)
Transportation and Warehousing 131.8 98.7 (33.13) 103.8 5.12 (21.2%)
Utilities 15.2 14.9 (0.32) 14.8 (0.17) (3.2%)
Construction 159.7 83.6 (76.15) 140.2 56.60 (12.2%)
Manufacturing 66.9 47.9 (18.98) 53.9 6.01 (19.4%)
SOURCE: New York Department of Labor, seasonally-adjusted by New York City OMB.
Since April, reopening allowed New York City to recover over 300,000 private sector jobs: more
than 56,000 in construction, 53,000 in retail, 96,000 in accommodation and food services, and
53,000 in healthcare and social assistance. Nonetheless, October private employment remained
14.2 percent below February levels, on a seasonally-adjusted basis. Employment in industries that
have yet to reopen, such as arts and entertainment, has not recovered. Through October, arts and
entertainment employment remains down almost 64 percent from pre-pandemic levels.
Historic job losses have led to historic levels of unemployment. New York City’s seasonally-
adjusted unemployment rate rose from a record low 3.4 percent before the pandemic to a record
high 20.3 percent in June. As job losses were concentrated in service sector jobs employing many
Black New Yorkers and recent immigrants, the unemployment rates of Black, Asian, and Hispanic
New Yorkers rose even higher. As of October, New York City’s unemployment rate stood at
13.2 percent, almost four times higher than before the pandemic.
Office of New York City Comptroller Scott M. Stringer 7
Chart 3. New York City Unemployment Rates
Asian Hispanic Black White Citywide (Seasonally Adjusted)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
SOURCE: New York Department of Labor, and Current Population Survey.
NOTE: Rates for individual demographic groups not seasonally-adjusted.
While unemployment is still rising, not all the news is grim. Wall Street took advantage of market
volatility, and lower borrowing costs to have two of its most profitable quarters in over a decade,
raking in $27.6 billion in pretax profits.
Nonetheless as the gains from partial reopening were exhausted, New York City’s rebound has
slowed, and by some measures gone into reverse. This is true of small business revenues.
Small business revenues declined dramatically across New York City in March. Manhattan small
business revenue was already declining in early March, and had declined by 70 percent by month’s
end, as businesses shuttered and commuters stayed home.
Small business revenues recovered with reopening, rising gradually from April through early
October, but has since begun to decline again. As of November 16th, small business revenues were
down 69 percent in Manhattan, 35 percent in Queens, 34 percent in Brooklyn, and 23 percent in
the Bronx compared to the beginning of the year.
8 The State of the City’s Economy and Finances
Chart 4. New York City Small Business Revenue
(Seasonally-Adjusted 7-day Average Benchmarked to the First Week of 2020)
Bronx Brooklyn Manhattan Queens Staten Island
40%
20%
0%
-20%
-40%
-60%
-80%
SOURCE: Womply, via Tracktherecovery.org
The Economic Outlook
Through the coming winter months employment gains are likely to level off, and possibly even be
reversed to some extent as colder weather puts a damper on outdoor dining, rising COVID
infections keep cautious consumers home, and City and State officials are forced to impose
targeted restrictions on commerce. In fact, on December 11th, the Governor announced that indoor
dining in restaurants in New York City would not be permitted starting December 14th. Nonetheless,
after a year filled with economic hardship, there is light at the end of the tunnel, and that light takes
the form of a vaccine.
There are currently over 50 vaccine candidates in development undergoing various stages of
clinical trials. 1 Preliminary data on the most advanced of these trials appears to show the vaccines
to be effective in preventing COVID-19 without serious or permanent side effects. The Food and
Drug Administration approved the Pfizer vaccine on December 11th, and approval of a second
vaccine is expected later in the month. Absent setbacks, approved vaccines are likely to be first
available to healthcare workers and vulnerable Americans in December 2020, widely available to
them in January 2021, and then widely available to the public beginning early in the spring.
1
https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Office of New York City Comptroller Scott M. Stringer 9
The Shape of Recovery
The current recession is unusual in that it has a single, clear, and unambiguous cause, a new virus
that impacted countries around the world at roughly the same time. The U.S. and other countries
that were unsuccessful at containing the initial spread of the virus have experienced similar
economic impacts: job losses in the service sector, reductions in consumer spending, increases in
savings, increases in telecommuting, closures of entertainment venues, and both voluntary and
government-imposed restrictions on social gatherings.
When effective vaccines become widely available and broadly administered, what impact does that
have on the COVID recession? Many people have in mind the recovery from the Great Recession
of 2008, a prolonged, gradual, multi-year recovery. Recovery from the COVID recession should
look very different; and a comparison shows why.
The Great Recession had multiple complicating factors. There was a bubble in the housing market,
leading to overinflated home prices. When it burst, home prices collapsed, and millions of
homeowners were left owing more than their homes were worth. Many defaulted on their mortgages
and walked away from their homes. Rising mortgage defaults distressed the banks holding
mortgages. Distressed banks, deprived of mortgage payments, were unable to make loans and
credit markets collapsed, cutting off the ability of businesses to borrow. Many of the mortgages had
been securitized, so when borrowers defaulted, it was difficult to determine who actually owned the
mortgages. Resolving the resulting mess of foreclosed homes, insolvent banks, and impoverished
homeowners took years.
The contrast with the COVID recession could not be more stark. Where the Great Recession began
with a huge hit to the net worth of homeowners, through both collapsing home and stock prices,
home prices across the U.S. have been rising through the COVID recession, buoyed in part by
mortgage rates at all-time lows. While there has been downward price pressure in urban areas
such as New York City, as telecommuters retreated to the country and suburbs for more space,
there has been no Great Recession-style collapse in home prices.
Where the Great Recession brought a stock market collapse that took a year to bottom out, and
many years to recover, this year’s collapse took a month to bottom out, and had fully recovered by
November. Absent a relapse, depressed stock values will not present a headwind to the current
recovery as they did in the Great Recession.
Where the Great Recession brought bank insolvency, complicated bail-outs and orchestrated
acquisitions of failing banks by stronger ones, the COVID recession does not entail any sort of
banking or financial crisis.
Where the Great Recession caused homeowners to pull back on spending as their wealth and
incomes collapsed from falling home prices, a crashing stock market, and widespread job losses,
the COVID recession has had a limited impact on higher-income, wealthier Americans who are
able to work remotely. Job losses and economic hardship have instead been concentrated among
lower-income service workers in retail, food service, and entertainment related businesses.
Although higher-income Americans did pull back on spending, both due to uncertainty, and
because they had fewer options for spending, they did not do so because their wealth and incomes
collapsed.
In fact, reduced consumption by U.S. consumers has resulted in record increases in personal
savings, a potential barometer of pent-up demand. In the Great Recession, Americans found their
desire to save constrained by falling incomes and loss of wealth, primarily in the form of home
equity. In comparison, even prior to the COVID pandemic, Americans were already more cautious
with their spending, saving at an annualized rate of roughly $1.2 trillion. This jumped to an
unprecedented $6.4 trillion in April, the greatest increase in personal savings in U.S. history, before
10 The State of the City’s Economy and Finances
falling to a still remarkable rate of $2.4 trillion in October. This pattern of COVID induced savings is
present in European countries as well. 2
Chart 5. U.S. Personal Savings
(Seasonally-Adjusted, Annual Rate)
$7,000
$6,000
$5,000
$4,000
$ in Billions
$3,000
$2,000
$1,000
$0 2007-…
2007-…
2008-…
2008-…
2009-…
2009-…
2010-…
2010-…
2011-…
2011-…
2012-…
2012-…
2013-…
2013-…
2014-…
2014-…
2015-…
2015-…
2016-…
2016-…
2017-…
2017-…
2018-…
2018-…
2019-…
2019-…
2020-…
2020-…
SOURCE: US Personal Savings, FRED
Anecdotally, Americans long to return to lives that include travel, entertainment, sporting events,
dining out, and social gatherings. Accumulated savings will allow Americans to quickly resume
these activities once a broadly available vaccine makes them possible.
Similarly, U.S. corporations have amassed record cash holdings of $2.1 trillion, an increase of
30 percent from the end of 2019. This cash remains available for business expansion, distribution
to shareholders, and paying off debt.
The global collapse in travel and entertainment has left airports, airplanes, cruise ships, stadiums,
theatres and hotels empty. But the infrastructure for all these activities remains in place, and will
be available once the pandemic has passed. It does not need to be rebuilt.
In short, none of the economic conditions that made the recovery from the Great Recession a slow
one are present in the current recession. The greatest pandemic in a century remains the greatest
obstacle to full economic recovery, but with vaccines likely to be available within the month, it is a
temporary one. Economic circumstances are otherwise largely favorable to economic growth, and
that growth should come quickly with widespread vaccine adoption and a full post-pandemic
reopening.
2
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20201110-2
Office of New York City Comptroller Scott M. Stringer 11
That is not to say the pandemic will not leave permanent scars on the U.S. and New York City
economies; it will. While large corporations sitting on piles of cash can easily expand in a post-
COVID boom, small businesses that have already closed, or are unable to survive the next few
months of COVID winter, cannot. Even when it is clear that demand has returned, replacing New
York City’s lost stores and restaurants will take time.
Some fraction of office workers currently telecommuting on a full-time basis will continue to do so.
Many others, if not most, will enjoy the flexibility of doing so on a part-time basis, and this could
have permanent effects on demand for New York City mass transit and office space, and on choices
for home ownership.
Despite these impacts, this is not the world’s first pandemic; and previous pandemics did not
permanently impact the fundamental economics of cities as centers of relationship building,
innovation, idea sharing, and creativity, or lead to permanent flights to rural areas.
Our forecast has no economic and employment growth in New York City through the remainder of
the year, as colder temperatures put a damper on outdoor dining, state and local governments
impose targeted shutdowns on economic activity to combat rising COVID infections, and wary
consumers increasingly stay home. With a vaccine likely available first to healthcare workers and
at-risk individuals in December 2020, increasing availability through the winter months, and
widespread availability to the general public in the coming Spring, our forecasts predicts a rapid
resumption of economic activity across the four quarters of 2021 and into early 2022.
Table 5 provides summary projections for seven NYC and U.S. indicators from 2020 to 2024,
comparing the Mayor’s November forecast with the Comptroller’s Office’s forecast.
Table 5. Selected Economic Indicators, Annual Averages, Comptroller
and Mayor's Forecast, 2020 to 2024
2020 2021 2022 2023 2024
SELECTED U.S. ECONOMIC INDICATORS (ANNUAL AVERAGES)
Comptroller (3.1) 3.7 4.4 4.0 2.1
Real GDP, (2012 $, % Change)
Mayor (3.6) 3.1 2.5 2.5 2.9
Comptroller (8.5) 3.7 3.9 2.7 1.2
Payroll Jobs, (Change In Millions)
Mayor (8.5) 5.1 3.8 2.1 1.8
Comptroller 0.4 0.1 0.1 0.6 1.5
Fed Funds Rate, (Percent)
Mayor 0.4 0.1 0.1 0.1 0.1
Comptroller 0.9 1.0 2.0 2.9 3.6
10-Year Treasury Notes, (Percent)
Mayor 0.9 1.0 1.2 1.4 1.6
SELECTED NYC ECONOMIC INDICATORS (ANNUAL AVERAGES)
Comptroller (5.6) 2.0 2.2 1.4 2.7
Real GCP (2012 $, % Change)
Mayor 0.2 2.5 3.2 1.8 1.7
Comptroller (538.5) 202.1 336.8 100.6 106.8
Payroll Jobs, (Change In Thousands)
Mayor (518.2) 170.3 232.6 93.9 66.1
Comptroller 5.9 0.1 2.1 2.1 1.4
Wage-Rate Growth, (Percent)
Mayor 4.3 2.4 1.9 2.4 2.6
12 The State of the City’s Economy and Finances
III. The November 2020 Financial Plan
The November 2020 Financial Plan increased the FY 2021 Adopted Budget by $3.83 billion to
$92.02 billion. The bulk of the increase is in the non-City-funds portion of the budget. Revisions to
the Federal portion of the budget account for $3.59 billion of the increase, driven by increases of
$1.48 billion in FEMA COVID-19 grants and $1.43 billion in CARES Act funding. The remaining
changes in the non-City-funds portion of the budget include increases of $90 million and
$19 million, respectively, in Other Categorical and Inter-fund Agreement revenues and spending,
and a decrease of $483 million in State categorical grants and expenditures. Federal and State aid
are discussed in greater detail beginning on page 23.
The City-funds budget, which excludes State, Federal, Other Categorical and Inter-fund Agreement
funding, totals $64.36 billion, an increase of $617 million from the Adopted Budget. As shown in
Table 6, the higher City-funds revenues result from an increase of $748 million in tax revenues,
partially offset by a net decrease of $131 million in non-tax revenues. The increase in tax revenues
reflects higher-than-expected collections through the first quarter of the fiscal year. Through
October, tax collections for the current fiscal year were $985 million more than forecasted for this
period in June.
Revisions to estimates for revenues from fines and forfeitures, and charges for services account
for the bulk of the reductions in non-tax City-funds revenues. Fines and forfeitures, and charges for
services are respectively, $76 million and $38 million less than in the Adopted Budget. Tax
revenues and miscellaneous revenues are discussed in greater detail in “Revenue Analysis”
beginning on page 17.
Table 6. Changes to FY 2021 City-Funds Estimates
from the Adopted Budget
($ in millions)
REVENUES EXPENDITURES
Personal Income Tax Revenues $251 Agency Expenditures $740
Business Tax Revenues 391 Health Insurance 685
Deferrals of Lump Sum/Retro/
Sales Tax 2 Welfare Fund Payments (639)
Real Estate Transaction Tax 75 Furlough/Labor Savings (19)
All Other Taxes 29 Citywide Savings Program (782)
Subtotal $748 Subtotal ($15)
Non-Tax Revenues (135) Budget Stabilization Account $632
City Savings Program 4
Total $617 Total $617
As shown in Table 6, the increase in City-funds expenditures is driven primarily by the
establishment of an FY 2021 Budget Stabilization Account (BSA) to prepay $632 million of FY 2022
Transitional Finance Authority (TFA) debt service. Net of the BSA, City-funds expenditure increases
are offset by spending reductions in the November Plan Citywide Savings program, resulting in a
net decrease of $15 million.
As discussed in “Labor” beginning on page 29, the City recently negotiated with several unions to
defer $722 million of FY 2021 payments until FY 2022. In return, the City credited $639 million of
the deferral and $19 million in furlough savings toward the $1 billion labor savings in FY 2021, to
Office of New York City Comptroller Scott M. Stringer 13
be identified by the unions and the City, that were included in the June 2020 Financial Plan. 3 In
June, the City had reduced health insurance expenditures by $1 billion in each of FY 2021 –
FY 2024 as a placeholder for the yet-to-be identified labor savings. The labor cost reductions from
deferrals and furloughs are used to restore part of the FY 2021 health insurance reductions, which
together with a $27 million increase from technical adjustments increase FY 2021 health insurance
expenditures by $685 million.
City-funds agency spending is $740 million more than the Adopted Budget. Most of the spending
increases are due to funding for new needs of $651 million. New needs in the Department of
Education (DOE) and Department of Sanitation (DOS) account for about 83 percent of the total.
New needs in the DOE include $157 million for school reopening, $200 million for pupil
transportation, and $45 million for the Learning Bridges program which provides child care options
from 8 a.m. to 3 p.m. for 3-K to 8th grade students for days they are scheduled for remote learning. 4
In the DOS, new needs include $113 million for the COVID-19 emergency food program, $12 million
for COVID-19 cleaning, and $14 million for waste export expenses.
Citywide Savings Program (CSP)
The November Plan Citywide Savings Program totals $1.92 billion over the four years of the
Financial Plan period, with savings of $786 million in FY 2021, $537 million in FY 2022, $259 million
in FY 2023, and $337 million in FY 2024. The bulk of the savings is in debt service savings which
account for almost 80 percent of the savings over the Plan period.
Almost 70 percent of the savings are in the first two years of the Plan, with estimated savings of
$1.32 billion. Savings in the latter half of the outyears are mainly from outyear debt service savings,
which account for 87 percent of the outyear savings. In the first two years of the Plan, debt service
makes up almost three-quarters of the savings, as shown in Chart 6. Efficiency initiatives account
for 13 percent of the savings. One initiative, a Citywide freeze on the purchase of vehicles that are
not critical to life and safety accounts for $81 million, or almost half of the efficiency savings. The
extension of the FY 2020 hiring freeze into FY 2024 accounts for another $49 million in efficiency
savings over the first two years of the Plan.
3
The credit towards savings exclude $83 million of the deferral for retirees. All lump sum payments for retirees were
booked as FY 2014 expenses.
4
The $45 million only funds early childhood Learning Bridges slots. According to the Office of Management and Budget,
expenses for the school age slots will be funded in the Department of Youth and Community Development.
14 The State of the City’s Economy and Finances
Chart 6. Combined FY 2021 and FY 2022 Citywide Savings Program
($ in millions)
Re-estimates Funding Shift
$79 $21
Accruals
6% 1%
$21
Service 2% Efficiency
Reduction $166
$44 13%
3%
Revenues
$10
1%
Debt Service
$983
74%
The Outyears of the Plan
While the FY 2021 budget is balanced, the November Plan shows budget gaps of $3.75 billion in
FY 2022, $2.97 billion in FY 2023, and $3.10 billion in FY 2024. The outyear gaps are in line with
outyear gaps in the November plans of the last two years in which outyear gaps ranged from
$2.95 billion to $3.54 billion. The FY 2022 gap represents 5.2 percent of City-funds expenditures
while gaps in FY 2023 and FY 2024 are 4 percent of City-funds expenditures. In the previous two
November plans outyear gaps averaged 4.3 percent of City-funds expenditures. While the gaps
appear manageable, it should be noted that the outyear projections include $1 billion of unspecified
labor savings.
The City’s tax revenue projections for the outyears remain unchanged from the June Plan. Non-tax
City-funds revenues are also essentially unchanged, with nominal downward revisions of $8 million
or less in each of the outyears
City-funds expenditures in the outyears, net of the impact of prepayments, are $201 million, higher
than the November Plan in FY 2022, and $74 million and $76 million lower in FY 2023 and
FY 2024, respectively. Revisions to outyear expenditures stem from the outyear CSP savings and
the phase-in of the FY 2020 pension investment shortfall against the actuarial interest rate
assumption of 7 percent. The additional contributions from the phase-in of pension investment
shortfalls are offset by CSP savings in the outyears, resulting in net reductions in expenditures in
FY 2023 and FY 2024. However, the negotiated deferrals of FY 2021 payments increase
expenditures by $639 million, offsetting savings from the CSP and resulting in a net increase in
FY 2021 City-funds expenditures.
Office of New York City Comptroller Scott M. Stringer 15
Risks and Offsets
As Table 7 shows, the Comptroller’s Office’s analysis of the November Plan shows risks to the
budget ranging from $128 million in FY 2021 to $3.04 billion in FY 2024. Risks to the Plan estimates
in FY 2021 and FY 2022 results from the Comptroller’s Office’s higher expenditure estimates. The
Comptroller’s Office’s higher tax revenue forecast in the first two years of the Plan provides some
offset against these expenditure risks. However, the Comptroller’s Office expects tax revenues to
be lower than the City’s forecast in FY 2023 and FY 2024, adding to the expenditure risks in these
years. The Comptroller’ Office’s tax revenue forecast is discussed in more detail in “Comptroller’s
Projections” beginning on page 18.
Table 7. Risks and Offsets to the November 2020 Financial Plan
($ in millions, positive numbers decrease the gap and negative numbers increase the gap)
FY 2021 FY 2022 FY 2023 FY 2024
City Stated Gap $0 ($3,752) ($2,966) ($3,102)
Tax Revenues
Property Tax $0 ($62) ($978) ($1,617)
Personal Income Tax 283 306 324 285
Business Taxes 0 (164) (300) (160)
Sales Tax 18 59 142 229
Real Estate Transaction Taxes 144 289 (28) (155)
All Other 129 86 14 56
Audit 0 200 200 200
Total Tax Revenues $574 $714 ($626) ($1,162)
Expenditures
Overtime ($272) ($130) ($130) ($130)
Charter School Tuition 0 (154) (282) (433)
Carter Cases (150) (150) (150) (150)
Pupil Transportation 0 (75) (75) (75)
DOE Medicaid Reimbursement (20) (20) (20) (20)
Pre-K Special Education 50 50 50 50
Fair Fares 0 (100) (100) (100)
Homeless Shelters (68) (68) (68) (68)
Labor Savings (342) (1,000) (1,000) (1,000)
VRDB Interest Savings 100 100 75 50
Total Expenditures ($702) ($1,547) ($1,700) ($1,876)
Total (Risks)/Offsets ($128) ($833) ($2,326) ($3,038)
Restated (Gap)/Surplus ($128) ($4,585) ($5,292) ($6,140)
The Comptroller’s Office estimates that expenditures could exceed the Plan projections by
$702 million in FY 2021, $1.55 billion in FY 2022, $1.70 billion in FY 2023, and $1.88 billion in
FY 2024. The biggest risk to expenditures is the assumption of as yet unspecified labor savings in
the Plan. The City had assumed $1 billion of labor savings in June and continues to include these
savings in the outyears of the November Plan. While the City had credited $658 million of deferral
and furlough savings to FY 2021, a residual risk of $342 million remains.
Other expenditure risks include funding for the Fair Fares program, overtime and expenditure
estimates in the DOE and the Department of Homeless Services (DHS). The Fair Fares program
remains unfunded in the outyears of the Plan. The Comptroller’s Office estimates that the program
could cost at least $100 million annually as participation rate picks up. Risks to overtime, DOE and
DHS are discussed below in the “Expenditure Analysis” section beginning on 24.
16 The State of the City’s Economy and Finances
The City’s conservative estimates of interest rates on variable rate debt bonds (VRDB) provide
some offset to the Comptroller’s Office’s expenditure risks. In an environment of low variable
interest rates and no indication that rates will rise to the level assumed over the Plan period, the
Comptroller’s Office estimates that debt service on VRDB could be less than the Plan projections
by $100 million annually in FY 2021 and FY 2022 and $75 million and $50 million in FY 2023 and
FY 2024, respectively.
Overall, the Comptroller’s Office’s analysis of the Plan indicates that the City could end FY 2021
with a deficit of $128 million and larger gaps of $4.59 billion in FY 2021, $5.29 billion in FY 2023,
and $6.14 billion in FY 2024.
Revenue Analysis
The City estimates that total revenues will grow by $6.25 billion over the forecast period, from
$92.02 billion in FY 2021 to $98.27 billion in FY 2024. City-funds revenues are projected to grow
from $64.36 billion in FY 2021 to $72.93 billion in FY 2024.
These projections reflect the City’s assumption of a gradual recovery in the local and national
economies from the effects of the pandemic. After declining by 5.9 percent in FY 2021, tax
revenues are projected to begin to rebound in FY 2022, and grow at an average annual rate of
4.6 percent from FY 2021 – FY 2024. It is important to note that the City has not altered in this Plan
the forecast of property tax revenues, the largest source of tax revenue.
Miscellaneous (non-tax) revenues, excluding intra-City revenues, are projected to decline
4.8 percent in FY 2021, to $4.99 billion and are not expected to recover to FY 2020 level over the
Plan period. In total, miscellaneous revenues are projected to remain relatively flat, growing by less
than a quarter of a percent to $5.0 billion in FY 2024.
FY 2021 Federal and State aid totals $25.90 billion and comprised 28 percent of the City’s overall
revenue estimate. Over the outyears of the Plan, Federal and State grants are projected to decline
to $23.28 billion in FY 2022 before increasing modestly over the remainder of the Plan to reach
$23.71 billion by FY 2024. The drop in FY 2021 is due mainly to the discontinuance of COVID-19
assistance beyond the current fiscal year while the outyear growth reflects State education aid
increases.
Tax Revenues: Revisions since the June 2020 Adopted Budget
The City revised non-property tax revenues upwards by $748 million in the current fiscal year
compared to the June Plan, to reflect stronger than projected collections. FY 2020 ended on a
stronger note than anticipated, with revenues exceeding year-end projections by $1 billion. Hence
some of the strength is a result of higher baseline revenues from the previous year. 5 The City did
not carry any of the higher near-term growth to the outyears, leaving the revenue forecast for the
remainder of the Plan period unchanged. Revisions were largely concentrated in the income taxes
as shown below.
5
This is particularly relevant for income taxes since taxpayers typically make estimated payments based on the previous
year’s filing.
Office of New York City Comptroller Scott M. Stringer 17
Table 8. Revisions to the City’s Tax Revenue Assumptions
June 2020 vs. November 2020
($ in millions) FY 2021
June 2020 Financial Plan $58,642
Personal Income (PIT) 251
Business Income 391
Sales 2
Real-Estate Transactions 75
All Other 29
Total $748
November 2020 Financial Plan $59,930
Comptroller’s Projections
The Comptroller’s revised forecast for FY 2021 also reflects higher than previously anticipated
collections, mainly in the personal income and business taxes. Similar to the City, the Comptroller’s
projections are predicated on a rebound in the local and national economies that is expected to
occur with the wide distribution of a COVID-19 vaccine. The Comptroller, however, anticipates
somewhat higher near-term growth in local employment and in the national economy as measured
by real GDP. Although this stronger forecast is partly offset by anticipated lower local wage rate
growth, the Comptroller’s forecast for income sensitive taxes exceeds the City’s forecast throughout
the Plan.
The main difference between the two forecasts is in the outyear forecast for property taxes, the
largest source of revenue. Although the City Department of Finance has not yet released the
FY 2022 tentative roll, the Comptroller’s Office has updated its projections for the property tax
based on available data. As shown in Table 10, these updated projections show lower estimated
property tax revenue compared to the City, particularly in the outyears. As shown in Table 10,
overall tax revenues beginning in FY 2023 are expected to be lower by $626 million than those
projected by the City, and nearly $1.2 billion lower in FY 2024.
The high degree of uncertainty surrounding the economic forecast and whether the pandemic has
resulted in or accelerated structural and behavioral changes makes the tax revenue forecast
equally uncertain.
18 The State of the City’s Economy and Finances
Table 9. Tax Revenue Forecast, Growth Rates
FYs 2021 – 2024
Average Annual
FY 2021 FY 2022 FY 2023 FY 2024 Growth
Property Tax
Mayor 3.5% 3.7% 2.7% 1.1% 2.5%
Comptroller 3.5% 3.5% (0.2)% (0.9)% 0.8%
Personal Income Tax
Mayor (12.0%) 8.8% 5.8% 3.9% 6.2%
Comptroller (9.9%) 8.8% 5.8% 3.6% 6.0%
Business Income Taxes
Mayor (19.2%) 7.6% 6.3% (0.3%) 4.5%
Comptroller (19.2%) 4.4% 4.0% 2.1% 3.5%
Sales Taxes
Mayor (8.2%) 19.6% 7.1% 2.9% 9.6%
Comptroller (8.0%) 20.1% 8.1% 3.8% 10.5%
Real Estate Transactions
Mayor (32.1%) 17.9% 14.9% 4.5% 12.3%
Comptroller (25.2%) 25.5% (3.3%) (2.1%) 5.9%
All Other Taxes
Mayor (17.4%) 16.7% 4.3% 2.0% 7.5%
Comptroller (12.7%) 14.0% 1.6% 3.5% 6.2%
Audits
Mayor (10.2%) (21.7%) 0.0% 0.0% (7.8%)
Comptroller (10.2%) 0.0% 0.0% 0.0% 0.0%
Total Taxes with Audits
Mayor (5.9%) 7.3% 4.6% 1.9% 4.6%
Comptroller (5.0%) 7.5% 2.4% 1.1% 3.7%
Table 10. Comptroller’s Office Risks and Offsets to the City’s Tax
Revenue Projections
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024
Property $0 ($62) ($978) ($1,617)
PIT 283 306 324 285
Business 0 (164) (300) (160)
Sales 18 59 142 229
Real Estate Transaction 144 289 (28) (155)
All Other 129 86 14 56
Audit 0 200 200 200
Total $574 $714 ($626) ($1,162)
Property Taxes
The pandemic is expected to have significant impacts on the City’s property markets and real estate
tax revenue. The impact on revenue will largely occur in the outer years due to the lagged nature
of assessment mechanisms. These impacts are expected to vary considerably by property types
and by geography (borough) as discussed below.
Class 1 properties, comprised of one- to three-family homes, are expected to be the least impacted
by the pandemic. Recent data suggests that prices for single family homes, particularly outside
Office of New York City Comptroller Scott M. Stringer 19
Manhattan, have held up relatively well, as larger spaces and desirable amenities like outdoor
space have commanded premiums during the pandemic. 6 In addition, because assessment
increases for Class 1 homes are capped, declines in market values will have little impact on
property tax revenue. Due to these caps, Class 1 homes are still “catching up” to their actual
assessed values. Therefore, billable assessments and tax revenue from Class 1 are not expected
to decline over the Plan period.
Class 2 properties, which include coops, condos and apartment buildings, are primarily located in
Manhattan and are assessed based on their income, or the income of comparable rental properties
in the case of coops and condos. The pandemic’s impact on the rental market has been both very
pronounced and swift, particularly in Manhattan which accounts for most of Class 2 market value.
Median effective rents net of concessions for rental properties in Manhattan are nearly 16 percent
lower compared to the previous year and vacancies have increased by more than four percentage
points. 7 While there are some signs that vacancies and demand have begun to stabilize more
recently, this has been achieved only through steep declines in rental rates and the widespread
use of concessions. 8 Outside of Manhattan, rental properties have fared only slightly better and
rental rates and vacancies are weaker compared to a year ago. It is also unclear how many tenants
are behind in their rent payments and could potentially face evictions once moratoriums enacted
by the Governor in response to the pandemic are lifted. Delinquencies on property tax payments
could also rise.
Given the weakness in market conditions, Class 2 net operating incomes and market values are
expected to decline between five to ten percent in the near term, and only gradually recover over
the outer years as the local economy improves. The impact of projected market value declines for
Class 2 property tax revenue will occur with a lag since increases and decreases in market values
are phased in over five years (the pipeline effect). The phase-ins of prior year’s increases will help
offset revenue declines in the near term, but revenue will begin to decline in FY 2023 and FY 2024
as the pipeline effect of prior year increases diminishes.
Class 4 properties include all other commercial properties such as offices, hotels, stores, theatres
warehouses and factories. The largest commercial proprieties, in terms of market values, are office
buildings, primarily located in the Manhattan commercial business district. Unlike Class 2 rental
property leases, which are renewed primarily on an annual or biennial basis, Class 4 office leases
are typically negotiated for longer periods of time. The impact on rents and vacancies is therefore
expected to be more staggered than for Class 2. 9 As leases come up for renewal over the forecast
period there will be significant downward pressure on rents with discounts of about 10 percent
compared to current levels, and increases in vacancies caused by weakening demand and a flood
of sublease space that has already hit the market. 10
Increased reliance on remote work poses a significant downside risk to the office market, both in
terms of lower office demand and by putting tenants in a much better position to bargain for lower
rents on renewal. According to a recent survey, only 13 percent of office workers had returned to
their offices in New York, the lowest share among large metro areas. 11 While the distribution of the
vaccine should coincide with a return of many workers to their offices, firms will likely continue to
rely on work from home much more than they did in the pre-pandemic world. This degree of reliance
6
https://www.elliman.com/resources/siteresources/commonresources/static%20pages/images/corporate-
resources/q3_2020/newyork-newsignedcontracts-10_2020.pdf
7
The Elliman Report: October 2020 Manhattan, Brooklyn & Northwest Queens Rentals prepared by Miller Samuel Real
Estate Appraisers
8
The Elliman Report: October 2020 Manhattan, Brooklyn & Northwest Queens Rentals prepared by Miller Samuel Real
Estate Appraisers e
9
Even when existing tenants put space up for sublease, the initial terms of the lease are still binding on the primary tenant
10
Manhattan Sublease Space Keeps Increasing as Asking Rents Start to Fall – Commercial Observer. We assume typical
lease terms of ten years and that in any given year 10 percent of all leases could be renewed.
11
https://www.crainsnewyork.com/commercial-real-estate/new-york-workers-are-most-reluctant-us-return-office
20 The State of the City’s Economy and Finances
is expected to vary considerably among firms and is unknown at this time. Some firms, primarily in
the tech sectors, have indicated that they will adopt widespread use of remote work in the future,
while others will adopt a more limited approach to work from home. 12 Changes to mass transit
service levels could also impact reliance on work from home.
As a result of overall weakening conditions in the office market, net operating incomes and market
values are expected to decline over the forecast period. The impact on tax revenue will begin to
occur slightly later than for Class 2, showing up more significantly in FY 2024 and beyond the Plan
period.
While the gradual turnover in rent rolls will help to delay the impact of the pandemic on office
property income, other commercial properties such as hotels, stores, and entertainment venues
will feel a more immediate impact. Hotel and retail properties have closed as a result of the
pandemic. 13 While some of these properties are expected to reopen with the recovery in the
economy, the scars left by the pandemic are expected to heal only very gradually, and in the case
of retail, the continued growth of online retail poses a long term threat. The one bright spot in the
forecast for commercial properties are warehouses, which have instead benefitted from the surge
in e-commerce sales and the need for fast delivery storage spaces. 14
Overall, as a result of deteriorating conditions in most property markets, property tax revenue is
expected to slow and begin to decline in 2024. The City still expects growth in revenue, albeit minor.
The resulting difference is a lower property tax forecast of $1.6 billion in 2024 compared to the City.
Personal Income Taxes
The Comptroller’s forecast for personal income taxes (PIT) has been revised upwards in FY 2021
to account for current collection trends that have been running ahead of our previous estimates.
Though year-to-date PIT collections are almost 10 percent lower compared to FY 2020, this decline
is lower than originally anticipated due mainly to the withholding component of PIT.
This unexpected strength in PIT collections is likely due to the fact that the stock market and Wall
Street profits have continued to rise in spite of the downturn in the broader economy. This is a
departure from the pattern seen in previous downturns when the stock market contracted sharply,
along with employment and GDP. It is also important to note that filers are likely continuing to make
estimated payments based on last year’s liability and residency status. Final income tax liability
due in April therefore remains highly uncertain.
In the outyears, the Comptroller’s forecast has been revised to reflect a somewhat faster rebound
in employment compared to the Adopted Budget. Since the City did not reflect the stronger growth
seen in recent collections in the outyears, the Comptroller forecast for PIT is higher than the City’s
throughout the Plan.
Business Taxes
Revenues from overall business taxes (General Corporation (GCT), Unincorporated Business
(UBT), and Banking Corporation (BCT)), though declining year to date through October by more
than 14 percent, are higher than originally anticipated. As with PIT, this unexpected strength is
likely due to the fact that certain sectors, including Wall Street and sectors related to the stay-at-
home economy, have significantly outperformed our initial expectations. In fact, according to recent
data, outside of a few struggling industries concentrated mainly in the leisure and travel sectors,
12
Twitter to allow most employees to work from home permanently (telegraph.co.uk) Jamie Dimon Calls for Return to
Offices, Sees Long-Term Damage of Work-From-Home - Bloomberg
13
New York City Roosevelt Hotel closing due to COVID-19 pandemic (usatoday.com)
14
https://nypost.com/2020/11/18/amazon-to-lease-giant-nyc-warehouse-space-for-delivery-center/
Office of New York City Comptroller Scott M. Stringer 21
S&P 500 earnings in the third quarter actually rose by 4.3 percent. 15 To reflect this greater than
anticipated strength, the Comptroller has revised business tax revenues upwards in FY 2021,
although revenues are still expected to decline significantly compared to FY 2020.
For FY 2022 – FY 2024, growth is expected to resume following the trajectory of overall growth in
the economy as measured by Real GDP. The forecast, which excludes audit revenue, is lower
compared to the City’s in the outyears. However, when factoring in audits, the two forecasts are
similar (see “Audits” below).
Sales Taxes
Sales tax collections have been tracking very closely to June estimates, declining by 20 percent
year to date through October compared to FY 2020. Overall sales tax revenue has been
significantly impacted by the collapse in the tourism and leisure sectors, which have shown few
signs of recovery so far. Outside of these two sectors, declines have been more contained and
offset by a dramatic increase in online sales. 16
The distribution of the vaccine is expected to result in a recovery in the entertainment and tourism
sectors, although the international and business travel segments may recover more slowly. 17 Pent
up demand and the uptick in tourism is expected to cause sales tax revenue to increase sharply in
2022 and 2023, followed by trend growth in 2024 as shown in Table 9. The forecast is somewhat
higher compared to the City’s, reflecting a slightly stronger assumption of local rebound in
employment and tourism.
Real-Estate Transaction Taxes
The Comptroller’s Office projects the combined revenues from real-estate-transaction taxes (the
real-property transfer tax and mortgage recording tax), to decline by 25.2 percent to $1.58 billion
in FY 2021. The City projects a greater decline of 32.1 percent to $1.43 billion. The anticipated
recovery in NYC employment and low interest rates are expected to cause real-estate transaction
taxes to increase by 25 percent in FY 2022, exceeding again the City’s forecast of recovery. For
the outer years, continued growth in NYC employment is expected to be offset by expected
increases in interest rates, resulting in a slight decline in real-estate transaction taxes while the City
shows continued increases in the outer years, as shown in Table 9.
Audits
The City projects audit revenue will drop sharply from approximately $900 million in FY 2021 to
only $721 million in FY 2022 – FY 2024. This pattern of below trend audit revenue in the outyears
is unlikely to occur. As a result, the Comptroller’s Office projects audit revenue collections to be at
least $200 million higher compared to the City in each of the outyears. The higher projections are
anticipated to be largely concentrated in business taxes.
Miscellaneous Revenues
In the November Plan, the City lowered its FY 2021 miscellaneous revenue projection by net
$131 million to $4.99 billion. The change is net of $4 million in additional revenues which were
15
Earnings would've been up in Q3 if it weren't for three industries: Morning Brief (yahoo.com)
16
New York by the Numbers: Weekly Economic and Fiscal Outlook No. 23 – November 2, 2020 : Office of the New York
City Comptroller Scott M. Stringer (nyc.gov)
17
Business Travel Expected To Lag Leisure On Path To Recovery | The Beat
22 The State of the City’s Economy and Finances
credited to the CSP. Table 11 shows the changes in the FY 2021 miscellaneous revenue
projections since the June 2020 Plan.
Table 11. Changes in FY 2021 Estimates
June 2020 vs. November 2020
($ in millions) June November Change
Licenses, Franchises, etc. $694 $680 ($14)
Interest Income 12 12 0
Charges for Services 1,013 975 (38)
Water and Sewer Charges 1,726 1,720 (6)
Rental Income 245 245 0
Fines and Forfeitures 1,028 952 (76)
Other Miscellaneous 400 403 3
Total $5,118 $4,987 $131
The current forecast is $252 million less than the $5.24 billion realized in FY 2020 and reflects the
impact of the slowdown in business and social activities precipitated by the COVID-19 outbreak
beginning in the third quarter of FY2020. 18 The largest drop is in revenues from fines and forfeitures,
which are projected to fall by $127 million, or 12 percent, as result of slowdowns in both business
and social activities and reduced enforcement. Interest income is expected to drop even more
precipitously as a percent of last year’s revenues. As a result of the Fed’s emergency rate cut in
response to the economic disruption from the COVID-19 pandemic, the City estimates that interest
income will fall by $125 million to $12 million, a drop of 91 percent.
Federal and State Aid
The November Plan projects Federal and State aid totaling $25.90 billion for FY 2021, reflecting a
net increase of $3.1 billion over the Adopted Budget. Federal and State grants support about
28 percent of total spending in the FY 2021 budget, with over 70 percent of the funding dedicated
to education and social services.
In the November Modification, the City has incorporated an additional $3.6 billion in Federal grants,
bringing the FY 2021 assumption to a total of $10.96 billion. The majority of the new aid is
attributable to a $2.91 billion increase in COVID-19-related funding, including $1.48 billion in FEMA
reimbursement and $1.43 billion in CARES Act funds. A significant portion of the FEMA grants
recognized in the November Plan is due to a change in the timing of reimbursements that were
originally assumed in FY 2020. A major component of the CARES Act funds increase involves a
funding shift of $721 million that the State utilized as substitute for its own education funding to the
City, therefore a corresponding decline is reflected in State aid resulting in no net impact on the
budget. The remainder of the CARES Act funds increase mainly includes $424 million in
Epidemiology and Laboratory Capacity grants for the Department of Health, $212 million in
Coronavirus Relief Fund revenue and $39 million in higher education grants.
In addition to the COVID-19-related funding, the November Plan also recognizes Federal aid
increases in other areas totaling about $680 million stemming mostly from rollover of unspent
grants from prior years and timing of certain Federal receipts, a technical procedure that typically
occurs in the first-quarter budget modification of each fiscal year. The bulk of this total is in the form
of Community Development Block Grant and Homeland Security grants.
18
FY 2020 revenues are net of $673 million of revenues from restricted fund activities and $31 million in housing
revenues to provide a compatible base for comparison with Plan revenues.
Office of New York City Comptroller Scott M. Stringer 23
As of the November Plan, the City expects to receive $14.9 billion in State aid in FY 2021, a
reduction of $483 million since the Adopted Budget. As mentioned above, the reduction mainly
reflects a $721 million adjustment to State Foundation Aid to account for the State’s use of Federal
CARES Act funds to temporarily replace state aid. Other revisions to State aid included increases
to certain expense-based education aid, such as charter school lease aid and charter school
supplemental tuition.
Over the outyears, the November Plan reflects only modest changes to Federal and State aid
assumptions. As expected, these projections show a decline of about $2.6 billion to $23.3 billion in
FY 2022, mainly due to the discontinuation of Federal COVID-19 assistance beyond the current
year. Thereafter, Federal and State grants are expected to increase moderately to $23.7 billion
annually in FY 2023 and FY 2024, mainly reflecting the City’s assumption of State education aid
growth in the outyears of the Plan.
State Budget
Last March, the pandemic took hold in New York just as the State was in the final stages of adopting
a budget for its fiscal year 2020 -- 2021. To present a balanced financial plan in April, the State
relied on to-be-determined budget reductions and broad authority to issue temporary and long-term
debt. More than eight months into the State’s fiscal year, however, the State has yet to outline how
an assumed $8 billion in recurring local aid cuts will be allocated. The Governor has indicated that
additional Federal relief could obviate the need to implement some or all of these reductions.
In the first seven months of the State’s fiscal year, April through October, State tax collections have
fallen $3.0 billion, or 6.4 percent, below last year. While collections have improved since the spring,
over the fiscal year to date, total State consumption and use taxes are down 14.6 percent, while
personal income taxes are down by 3.8 percent. Since February, the State Division of Budget
(DOB) has reduced the State’s receipts forecast by $14.9 billion in the current fiscal year and
$16.3 billion next year.
The State has benefited from past Federal COVID-19 relief bills, including $5.1 billion from the
Coronavirus Relief Fund, $3.0 billion from the 6.2 percentage point increase in Medicaid FMAP,
and $1.1 billion from CARES Act education funds. Early in the fiscal year, the State also issued
$4.5 billion in short-term borrowing to meet liquidity needs presented by the filing date extension
for income tax returns from April to July. The State expects to repay these notes within the fiscal
year but has the contingency option of converting the notes to long-term debt.
As of October, DOB forecasts a budget gap of $8.7 billion in state fiscal year 2021 – 2022, exclusive
of the to-be-determined $8 billion in recurring local aid cuts. In January, the Governor will present
his plan to balance next year’s budget.
Expenditures Analysis
Total-funds FY 2021 expenditures in the November Financial Plan are projected to drop by
$3.01 billion, or 3.2 percent, from FY 2020. However, both FY 2020 and FY 2021 expenditures
include prepayments which lower debt service expenditures in these fiscal years, and the use of
Retiree Health Benefits Trust (RHBT) funds to defray part of retiree health insurance cost. In
addition, expenditures in FY 2020 are further reduced by the take-down of the general reserve and
the re-estimates of prior-year accruals. After adjusting for prepayments, and excluding re-estimates
of prior-year accruals and reserves, expenditures are projected to drop by less than one percent,
from $97.02 billion in FY 2020 to $96.71 billion in FY 2021.
Over the Plan period, adjusted expenditures before reserves are projected to grow by 3.5 percent,
as shown in Table 12. This growth is driven primarily by increases in expenditures for debt service,
health insurance, other fringe benefits and Medicaid, which together are estimated to grow by
24 The State of the City’s Economy and Finances
$4.73 billion, or 20.6 percent. However, the growth in Medicaid is due to a one-time decrease in
FY 2021 from eFMAP savings. Medicaid expenditures are flat at $5.92 billion over the remainder
of the Plan period.
Table 12. FY 2021 – FY 2024 Expenditure Growth
Adjusted for Prepayments and Prior-Year Actions
Growth Annual
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 FYs 21 – 24 Growth
Debt Service $6,672 $7,684 $8,469 $8,826 32.3% 9.8%
Health Insurance 6,940 6,928 7,618 8,292 19.5% 6.1%
Other Fringe Benefits 4,087 4,529 4,504 4,634 13.4% 4.3%
Medicaid 5,238 5,915 5,915 5,915 12.9% 4.1%
Subtotal $22,936 $25,057 $26,506 $27,667 20.6% 6.4%
Salaries and Wages $28,971 $29,904 $30,083 $30,362 4.8% 1.6%
Pension Contributions 9,820 10,454 10,426 10,198 3.8% 1.3%
Public Assistance 1,626 1,651 1,650 1,650 1.5% 0.5%
Judgments & Claims 727 742 758 775 6.5% 2.1%
Contractual Services 18,301 16,890 16,926 16,880 (7.8%) (2.7%)
Other OTPS 14,326 12,105 12,319 12,594 (12.1%) (4.2%)
Subtotal $73,773 $71,746 $72,162 $72,459 (1.8%) (0.6%)
Expenditures Before Reserve $96,709 $96,803 $98,668 $100,126 3.5% 1.2%
Retiree Health Benefits Trust ($1,600) $0 $0 $0
General Reserve $100 $1,000 $1,000 $1,000
Capital Stabilization Reserve $0 $250 $250 $250
Total $95,209 $98,053 $99,918 $101,376 6.5% 2.1%
NOTE: Numbers may not add due to rounding.
COVID-19 Expenditures
FY 2021 COVID-19 related expenditures total $2.75 billion in the November Plan, an increase of
$2.63 billion from the June Financial Plan. About half of the increase is due to the roll-in of FY 2020
expenditures. COVID-19 related spending in FY 2020 was $2.62 billion, $1.39 billion below the
June Plan estimate. Table 13 shows the allocation of COVID-19 spending by purpose. As shown
in the table, more than 60 percent of the spending is allocated for medical, surgical and lab supplies;
testing and tracing; and food and forage supplies. Almost 87 percent of the expenditures are
expected to be funded with Federal categorical grants. Approximately 12 percent, or $342 million,
will be funded with City tax levy.
Table 13. FY 2021 COVID-19 Budget Allocation by Purpose
($ in millions) Amount Percent
Medical, Surgical and Lab Supplies $659 24.0%
Testing and Tracing 566 20.6%
Food and Forage 521 18.9%
Emergency Response 259 9.4%
Disease Prevention and Treatment (DOHMH) 176 6.4%
Shelter Intake (DHS) 176 6.4%
Remote Learning 55 2.0%
311 Surge Staffing 13 0.5%
Other 325 11.8%
Total $2,750 100.0%
Office of New York City Comptroller Scott M. Stringer 25
Headcount
The November 2021 Headcount Plan shows net headcount reductions from the June 2020 Plan of
414 in FY 2021, 1,234 in FY 2022, 743 in FY 2023 and 748 in FY 2024. The reductions in
headcount reflect an expansion of the hiring freeze in the June 2020 Plan. The additional hiring
freeze is estimated to reduce headcount by 549 in each of FY 2021 and FY 2022 and 548 in each
of FY 2023 and FY 2024. FY 2022 headcount is further reduced by the suspensions of the organics
collection program and the fly car pilot program and its planned expansion in FY 2022. These
suspensions, part of the Mayor’s Citywide Savings Program, are estimated to reduce 198
uniformed headcount in the Department of Sanitation and 285 civilian positions in the Fire
Department.
Despite the hiring freeze, full-time headcount, as shown in Table 14, is projected to increase from
302,002 in FY 2021 to 304,759 in FY 2022 and more than 305,000 in FY 2023 and FY 2024.
Table 14. Total Funded Full-Time Year-End Headcount Projections
November 2020 Financial Plan
FY 2021 FY 2022 FY 2023 FY 2024
Pedagogical
Dept. of Education 123,968 126,710 126,710 126,710
City University 4,441 4,441 4,441 4,441
Subtotal 128,409 131,151 131,151 131,151
Uniformed
Police 35,007 35,030 35,030 35,030
Fire 10,945 10,945 10,952 10,952
Correction 7,219 7,060 7,060 7,060
Sanitation 7,425 7,422 7,620 7,620
Subtotal 60,596 60,457 60,662 60,662
Civilian
Dept. of Education 12,790 13,066 13,066 13,066
City University 1,947 1,946 1,946 1,946
Police 15,240 15,430 15,430 15,430
Fire 6,308 6,310 6,595 6,595
Correction 1,730 1,827 1,827 1,827
Sanitation 2,124 2,122 2,122 2,122
Admin. for Children’s Services 7,249 7,249 7,249 7,249
Social Services 13,504 13,592 13,592 13,592
Homeless Services 2,203 2,104 2,104 2,104
Health and Mental Hygiene 5,848 5,771 5,764 5,759
Finance 2,102 2,102 2,102 2,102
Transportation 5,373 5,408 5,410 5,412
Parks and Recreation 4,340 4,260 4,260 4,260
All Other Civilians 32,239 31,964 31,881 31,881
Subtotal 112,997 113,151 113,348 113,345
Total 302,002 304,759 305,161 305,158
Table 15 compares planned FY 2021 year-end headcount with the actual headcount on September
30, 2020 — three months through the fiscal year. The Administration has projected an increase of
1,556 full-time positions during FY 2021, consisting of an increase of 2,122 civilian positions and
2,787 pedagogical positions, and a decrease of 3,353 positions in the uniformed services.
As of September 30th, however, total headcount has declined by 4,563 positions, with a decrease
of 1,600 pedagogical positions, 1,642 uniformed positions, and 1,321 civilian positions. To achieve
the planned year-end headcount, the City would need a net increase of 6,119 in headcount by the
26 The State of the City’s Economy and Finances
end of the year — nearly four times the planned increase for FY 2021. It is unlikely that the City will
be able to make up for the shortfall in hiring. As such, it is likely that the City will be able to recognize
additional accrual savings from a shortfall in hiring for the current fiscal year.
Table 15. September 30, 2020 Headcount
vs. Planned June 30, 2021 Headcount
Change Planned
6/30/2020 Change Percent of
6/30/2021 Actuals to 6/30/2020 Planned
6/30/2020 9/30/2020 Nov. 2020 9/30/2020 to Change
Actuals Actuals Plan Actuals 6/30/2021 Achieved
Pedagogical
Dept. of Education 121,077 119,559 123,968 (1,518) 2,891 (52.5%)
City University 4,545 4,463 4,441 (82) (104) 78.8%
Subtotal 125,622 124,022 128,409 (1,600) 2,787 (57.4%)
Uniformed
Police 35,910 34,694 35,007 (1,216) (903) 134.7%
Fire 11,047 10,970 10,945 (77) (102) 75.5%
Correction 9,237 9,046 7,219 (191) (2,018) 9.5%
Sanitation 7,755 7,597 7,425 (158) (330) 47.9%
Subtotal 63,949 62,307 60,596 (1,642) (3,353) 49.0%
Civilian
Dept. of Education 13,607 13,498 12,790 (109) (817) 13.3%
City University 1,743 1,728 1,947 (15) 204 (7.4%)
Police 15,519 15,219 15,240 (300) (279) 107.5%
Fire 6,366 6,294 6,308 (72) (58) 124.1%
Correction 1,741 1,699 1,730 (42) (11) 381.8%
Sanitation 2,107 2,086 2,124 (21) 17 (123.5%)
Admin. for Children’s 7,039 6,959 7,249 (80) 210 (38.1%)
Social Services 12,330 12,195 13,504 (135) 1,174 (11.5%)
Homeless Services 2,119 2,091 2,203 (28) 84 (33.3%)
Health and Mental Hygiene 5,530 5,473 5,848 (57) 318 (17.9%)
Finance 1,996 1,972 2,102 (24) 106 (22.6%)
Transportation 5,120 5,094 5,373 (26) 253 (10.3%)
Parks and Recreation 4,236 4,171 4,340 (65) 104 (62.5%)
All Other Civilians 31,422 31,075 32,239 (347) 817 (42.5%)
Subtotal 110,875 109,554 112,997 (1,321) 2,122 (62.3%)
Total 300,446 295,883 302,002 (4,563) 1,556 (293.3%)
Overtime
The November Plan includes $991 million for FY 2021 overtime expenditures, an increase of
$64 million when compared to the Adopted Budget. Due to the COVID-19 pandemic, spending for
overtime is lower than normal with the scale-back on everyday operations and non-essential City
employees working from home. Despite the lower year-to-date spending, the Comptroller’s Office
estimates that overtime spending will exceed the Plan projections by $272 million in FY 2021 and
$130 million in each of the outyears of the Plan.
Risk to the uniformed police overtime budget accounts for almost two-thirds of the overall overtime
risk in FY 2021, as shown in Table 16. The Adopted FY 2021 Budget reduced budgeted uniformed
police overtime spending to $227 million. While the suspension of planned events such as parades
and street fairs will lower overtime costs, the Comptroller’s Office estimates that uniformed police
overtime cost could exceed the City’s estimate by $173 million. Through October of FY 2021, the
Office of New York City Comptroller Scott M. Stringer 27
City has spent $112 million for uniformed police overtime and is on pace to spend about
$400 million for FY 2021.
Citywide civilian overtime spending is expected to be much lower in FY 2021 than the FY 2020 cost
of $601 million. Based on the year-to-date spending, the Comptroller’s Office expects civilian
overtime cost to be at least $420 million. This is $99 million more than the City’s projection of
$322 million.
Table 16. Projected FY 2021 Overtime Spending
City Comptroller’s
Planned Projected
Overtime Overtime FY 2021
($ in millions) FY 2021 FY 2021 Risk
Uniformed
Police $227 $400 ($173)
Fire 224 224 0
Correction 84 84 0
Sanitation 135 135 0
Total Uniformed $670 $843 ($173)
Civilians
Police-Civilian $42 $42 $0
Admin for Children’s Services 5 20 (15)
Transportation 53 60 (7)
All Other Agencies 221 298 (77)
Total Civilians $321 $420 ($99)
Total City $992 $1,263 ($272)
Health Insurance
The November Plan projects that the City’s spending on health insurance for active employees and
retirees will increase from $5.34 billion in FY 2021 to $8.29 billion in FY 2024. The FY 2021
estimate is $685 million more than estimated in the Adopted Budget. The increase reflects primarily
the substitution of health insurance savings assumed in the Adopted Budget with spending
reductions due to negotiated deferrals of lump sum payments and savings from managerial and
non-represented employee furloughs.
In the June 2020 Financial Plan, health insurance projections were lowered by $1 billion in each of
FY 2021 – FY 2024 as a placeholder for savings to be negotiated with the City’s labor unions. Since
then, the City has negotiated with the unions to defer $722 million of FY 2021 lump sum and welfare
fund payments to FY 2022, of which $639 million are recognized as budget reductions as discussed
in “Labor” beginning on page 29. In addition, the City implemented a five-day furlough of managerial
and non-represented employees which is estimated to produce $19 million in savings. The City has
credited the combined $658 million spending reductions as part of the $1 billion labor savings,
leaving $342 million of the remaining savings as a reduction in health insurance expenditures.
As shown in Table 17, the FY 2021 health insurance projection is further adjusted to defray
$1.6 billion of retiree pay-as-you-go health insurance cost in FY 2021. Annual retiree health
insurance cost is paid out of the RHBT. In normal circumstances, the City would remit the cost of
retiree health insurance to the RHBT. However, faced with the fiscal challenges in the wake of the
COVID-19 pandemic, the City is reducing its remittance to the RHBT by $1.6 billion for FY 2021
and drawing on the RHBT surplus to make up the shortfall in remittance.
28 The State of the City’s Economy and Finances
Health insurance expenditures in the outyears remain relatively unchanged from the June 2020
Plan, with reductions of $24 million in FY 2022 and $16 million in FY 2023 and FY 2024. The
expenditure projections are based on premium rate increases of 3.0 percent in FY 2021,
6.5 percent in FY 2022, 6.25 percent in FY 2023 and 6.0 percent in FY 2024. The rate increase for
FY 2021 was capped as part of the 2018 Health Savings Agreement. Premium rate increases for
retiree health insurance are projected to be 4.9 percent for FY 2021 and FY 2022, and 4.8 percent
in FY 2023 and FY 2024.
Table 17. Pay-As-You-Go Health Expenditures
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024
Department of Education $2,824 $3,066 $3,365 $3,655
CUNY 116 140 143 147
All Other 4,000 3,722 4,109 4,489
Sub-total $6,940 $6,928 $7,618 $8,292
RHBT (1,600) 0 0 0
PAYGO Health Insurance Cost $5,340 $6,928 $7,618 $8,292
Pensions
Pension contributions in the November Plan are projected to grow from $9.82 billion in FY 2021 to
$10.2 billion in FY 2024, an increase of 3.8 percent. As shown in Table 18, pension contributions
in the current Plan include the phase-in of the recognition of the shortfall in FY 2020 pension
investment earnings relative to the actuarial interest rate assumption (AIRA) of 7 percent. The
pension funds earned a combined return of 4.44 percent on market value for FY 2020, below the
7 percent AIRA. This shortfall in returns will be phased in beginning in FY 2022 and will increase
pension contributions by $85 million in FY 2022, $165 million in FY 2023, and $242 million in
FY 2024.
Table 18. Changes to City Pension Contributions
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024
Five Actuarial Systems $9,808 $10,132 $9,970 $9,635
Other Systems & Reserves 124 350 405 435
Less: Intra City-Expense (112) (112) (112) (112)
Net Pension Expense Adopted Budget $9,820 $10,370 $10,263 $9,958
FY 2020 Investment Losses below AIRA 0 84 165 242
Other 0 0 1 2
Net Pension Expense November Plan $9,820 $10,454 $10,426 $10,198
Labor
The current balance in the labor reserve is $893 million in FY 2021, $1.29 billion in FY 2022,
$955 million in FY 2023, and $1.14 billion in FY 2024. When compared to the June 2020 Financial
Plan, the labor reserve was lowered by $812 million in FY 2021, increased by $450 million in
FY 2022, and remains relatively unchanged in FY 2023 and FY 2024. With the exception of a
$536,000 reduction in FY 2021 from furlough savings, all other changes to the labor reserve reflects
the transfer of collective bargaining funds out the labor reserve to individual agencies or shifting of
funds from one year to the next because of deferrals of payments of lump sums, and retro wages.
Recently, the City reached agreements with several unions to defer a total of $722 million of
FY 2021 lump sum, retro wage, welfare fund and annuity payments to FY 2022. 19 Of this only
$639 million are recognized as savings in the budget. The lump sum deferrals include deferrals for
19
The agreements deferred half the lump sum payments due in FY 2021 to FY 2022.
Office of New York City Comptroller Scott M. Stringer 29
both active employees and retirees. However, the City had booked retiree lump sum payments as
an FY 2014 expense. Thus, the deferral of retiree lump sum payments, which account for
$83 million of the lump sum deferrals, do not yield budget savings. 20 The lump sum deferrals reduce
the FY 2021 labor reserve by $451 million with a concomitant increase in the FY 2022 labor
reserve. The transfer of $359 million out of the labor reserve to pay for half of the FY 2021 lump
sum payments account for most of the remaining decrease in FY 2021 labor reserve.
Public Assistance
Through October, the City’s public assistance caseload has averaged 389,471 recipients per month
thus far in FY 2021. Average monthly caseload has jumped 17 percent, or nearly 57,000 recipients
compared to the same period in FY 2020. As shown in Chart 7, the City’s public assistance
caseload has risen rapidly during the COVID-19 pandemic, spiking from 325,016 in March 2020 to
387,355 in July 2020. Though, since July, the pace of growth has tapered off significantly and
declined slightly in October.
Chart 7. 2020 Public Assistance Caseload and Monthly Changes
Monthly Caseload Change Caseload
400,000 36,000
Monhly Caseload Change
380,000 28,000
360,000 20,000
Caseload
340,000 12,000
320,000 4,000
300,000 (4,000)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
The caseload increase is attributable to a significant number of new applications that came in during
the early months of the COVID-19 pandemic, in some cases reaching 50 percent above the normal
rate. Moreover, the City suspended eligibility certifications during the months of March – August,
leading to declines in the number of case closings by as much as 75 percent in certain months
during this span. Despite the significant rise in caseload, monthly baseline grants spending in
FY 2021 has averaged about $122 million to date, reflecting a much smaller increase of about
5 percent over the same period in FY 2020.
While the City has not released new caseload projections, the November Plan maintains baseline
grants expenditure estimates at approximately $1.45 billion in the current year and $1.48 billion in
each of FY 2022 – FY 2024. Barring a significant rise in monthly spending, the City’s public
assistance expenditures remain adequately budgeted.
20
While retiree lump sums do not provide any budgetary reductions, they provide the City with $83 million of cash relief in
FY 2021, bringing total cash relief from deferrals in FY 2021 to $722 million.
30 The State of the City’s Economy and Finances
Department of Education
The November Modification projects a $28.48 billion budget for the DOE in the current year (net of
intra-City funds), reflecting a net increase of $927 million since Adoption. The current FY 2021
budget projection represents an increase of 1.6 percent or $462 million compared to FY 2020
actual expenditures of $28.02 billion.
Key changes in the FY 2021 DOE budget include new needs of $402 million and collective
bargaining transfers of $358 million. Among the new needs reflected in the November Plan, the
City has provided $157 million to address school reopening costs in the midst of the COVID-19
pandemic, including $80 million for per diem/substitute teacher staffing and overtime costs and
$71 million for COVID-19 protection supplies and equipment. Other new needs recognized in the
Plan are $200 million for pupil transportation costs for special education buses and $45 million for
the Learning Bridges program providing child care services on remote learning days. The largest
component of collective bargaining transfers from the Labor Reserve is a $348 million retroactive
lump sum payment for salary increases negotiated in the prior UFT contract. The payment
represents only half of the final installment originally scheduled for completion in FY 2021. The
residual portion of the payment has been deferred until FY 2022 under an agreement between the
UFT and the City to provide budget relief in the current year.
The remainder of the FY 2021 changes include $131 million in additional State revenue mainly for
charter schools and school technology initiatives and $31 million in savings restorations. In addition,
the City has recategorized $721 million to reflect the Federal Cares Act funding the State used to
offset State education aid. The funding swap accounts for the State’s use of Federal funds to offset
school aid reductions assigned to the City with no net impact on the DOE or City budget.
In the outyears, the DOE budget is expected to rise to $28.69 billion in FY 2022, reflecting an
increase of about $214 million from the FY 2021 projection. Over the remainder of the Plan, funding
for the Department is projected to rise to $29.48 billion in FY 2023 and $29.88 billion in FY 2024,
reflecting annual increases of $792 million and $397 million, respectively. The assumed increase
in State education aid is a significant driver of the outyear growth in the DOE budget. However,
given the State’s budget difficulties, it is unclear if these assumptions are sustainable.
Moreover, the DOE budget has not yet reflected potential costs from increased charter school
tuition rates expected to be approved by the State in the outyears. Unless the State provides
additional reimbursement in future years, the City estimates potential shortfalls of $154 million in
FY 2022, $282 million in FY 2023 and $433 million in FY 2024. Further, the budget for special
education Carter Cases remains significantly underfunded and will likely require additional funding
of $150 million in each year of the Plan. In addition, the November Plan has provided additional
funding for pupil transportation in FY 2021 without addressing needs in the outyears, which could
result in risks of $75 million annually in FY 2022 – FY 2024. Rounding out the assessment are
Medicaid revenue risks of $20 million and special education pre-K underspending of $50 million in
each year of the Plan.
Homeless Services
Spending on adult and family shelter in the Department of Homeless Services (DHS) is the primary
driver of the City’s homelessness expenses. However, funding for homeless assistance is also,
and increasingly, drawn from the budgets of other agencies, including the Department of Social
Services, the Department of Youth and Community Development, the Department of Health and
Mental Hygiene and the Department of Veterans Services. Table 19 details changes in total funding
for seven major categories of homeless services across these agencies in the November
modification.
Office of New York City Comptroller Scott M. Stringer 31
Table 19. Citywide Homeless Services Expenditures
Modified Adopted
($ in millions) FY 2021 FY 2021 Change
Adult Shelter Operations $659 $656 $3
Family Shelter Operations 1,125 1,124 1
Rental Assistance 509 493 17
Prevention, Diversion, Anti-Eviction & Aftercare 486 484 2
Domestic Violence, Youth & Emergency Shelters 113 111 2
Homeless Administration & Support 446 268 178
Total Citywide Homeless Spending $3,338 $3,137 $202
The November modification raises citywide homeless services spending for FY 2021 by
$202 million, an increase of 6.4 percent. The bulk of that increase is attributable to $176 million in
emergency funding from the FEMA COVID-19 Emergency Program which has been appropriated
for shelter intake programming in the general administration budget at DHS.
Since the Mayor first declared a state of emergency on March 12, 2020, substantial shifts in
population and composition of the City’s shelter system have taken place. The overall shelter
census has dropped by more than 6,100 individuals since last November; more than two-thirds of
that group exited shelter after March 12th. The decline in the City’s shelter census during the
pandemic period has been driven by the exit of more than 4,300 individuals in families with children
from the shelter system. However, the entry of more than 1,000 single adults during this same time
period partially offsets these recent overall census reductions. Single adults have been a
consistently growing demographic group in the City’s shelter system, having increased by
approximately 9 percent in the last year and 64 percent since this time in FY 2014.
Even though budgeted shelter operations expenses for families and adults will modestly increase
in the November modification, sufficient funding for adult shelter operations is a persistent concern.
Actual DHS spending for Adult Shelter Operations was $826 million in FY 2020 yet the November
modification budgets only $659 million for Adult Shelter Operations in FY 2021. Given steady
increases in the single adult shelter population and the uncertainty of the COVID-19 outbreak, the
Comptroller’s Office does not anticipate that adult shelter operations expenses in FY 2021 will drop
from FY 2020 levels. Taking $127 million in Federal CARES ACT funding for adult shelter
operations into account, the Comptroller’s Office projects a risk of $67.7 million in City-funds for
adult shelter operations in FY 2021.
Citywide spending on rental assistance will rise by more than 3 percent in the November
modification, driven by $16.4 million in increased citywide supportive housing expenditures,
including programming for people living with HIV/AIDS and for homeless mentally ill individuals.
Other noteworthy changes to expenses in the November Modification include a doubling of funding
for runaway and homeless youth programming at Department of Youth and Community
Development and a more than $1 million increase in overall spending for anti-eviction programs
and services at the Department of Social Services.
32 The State of the City’s Economy and Finances
IV. Capital Budget and Financing
Program
The FY 2021 – FY 2024 Adopted Capital Plan, released with the November Financial Plan, totals
$69.88 billion in all-funds authorized commitments, a $2.67 billion increase compared to the April
2020 Capital Plan. City-funds authorized commitments make up $64.20 billion of the total
authorized commitments. After adjusting for the reserve for unattained commitments, all-funds
planned commitments drop to $61.03 billion, as shown in Table 20. The City-funds commitments
after adjusting for the reserve for unattained commitments drop to $55.35 billion. The Plan is less
front-loaded than in the past, with 25 percent, or $17.45 billion, of the all-funds authorized
commitments scheduled for FY 2021. In the outyears of the Plan, commitments decrease to
$17.05 billion in FY 2022 and $16.95 billion in FY 2022, but then increase to $18.45 billion in
FY 2024, resulting in a more balanced average of $17.47 billion per year over the period.
Table 20. FY 2021 Adopted Capital Commitment Plan
All-Funds FY 2021 – FY 2024
FY 2021 - FY 2024 Percent of Change from
($ in millions) Adopted Plan Total April 2020
Education & CUNY $16,301 23.3% $1,276
Environmental Protection 8,275 11.8% (366)
Dept. of Transportation & Mass Transit 9,904 14.2% 289
Housing and Economic Development 10,258 14.7% 1,309
Administration of Justice 6,624 9.5% (1,444)
Resiliency, Technology and Citywide
Equipment 5,164 7.4% 401
Dept. of Parks and Recreation 3,667 5.2% 149
Hospitals 2,369 3.4% 808
Other City Operations and Facilities 7,316 10.5% 252
Total $69,877 100.0% $2,674
Reserve for Unattained Commitments (8,846) (4,969)
Adjusted Total $61,031 N/A ($2,295)
SOURCE: Office of Management and Budget, FY 2021 Adopted Capital Commitment Plan, November, 2020. Numbers
may not tie due to rounding.
The City’s report on actual FY 2020 capital commitments shows all-funds commitments totaling
$8.06 billion, $7.94 billion below the FY 2020 authorized commitment level of $16.01 billion in the
April 2020 Plan, or an achievement rate of 50.4 percent. The almost $8 billion shortfall in
commitments against plan suggests that most of the combined $2.67 billion increase in the
Commitment Plan is due to a shifting forward of unmet FY 2020 commitments.
Estimated commitments for capital projects in DOE and the City University of New York (CUNY),
account for $16.3 billion or 23.3 percent of planned all-funds commitments ($15.84 billion for DOE
projects). Other major components of the Plan are capital projects in the Department of
Environmental Protection (DEP) which comprise 11.8 percent of the planned all-funds
commitments, DOT and Mass Transit projects which account for 14.2 percent, and Housing and
Economic Development projects which account for 14.7 percent of the Plan. 21 These four major
21
DEP capital commitments are primarily funded through the issuance of New York Water Finance Authority (NYW) debt.
Office of New York City Comptroller Scott M. Stringer 33
program areas constitute a majority of the Commitment Plan, accounting for $44.74 billion, or
64 percent of the Plan.
The all-funds increase of $2.67 billion is made up of an increase in FY 2021 of $712 million, followed
by a decrease in FY 2022 of $1.12 billion, a modest increase of $19 million in FY 2023, and an
increase of $3.06 billion in FY 2024. The largest increases in FY 2021 are $1.23 billion for NYCHA
and $551 million for Transit related projects. These increases are largely the result of rollovers from
FY 2020.
The November 2020 Capital Plan includes 549 new project IDs with combined commitments of
$5.70 billion over FY 2021 – FY 2024. Of these, 14 project ID’s account for $4.48 billion, or
79 percent of the combined commitments. These projects include $3.68 billion for borough-based
jails in Brooklyn, the Bronx, Manhattan, and Queens transferred from the generic “New Jail
Facilities” project ID. In addition, there are $320 million of resiliency projects and $86 million for
DOITT’s next generation 911 calling system. In contrast, the largest deferral to the outyears is the
Gowanus Canal superfund project with a decrease of $363 million over the FY 2021 – FY 2024
Plan period.
The City’s November 2020 Capital Commitment Plan includes an update of the Ten-Year Capital
Strategy (TYCS) by broad programmatic categories (Project Types) over the FY 2021 – FY 2029
period. The updated TYCS over FY 2021 – FY 2029 sums to $119.24 billion, an increase of
$9.11 billion versus the updated TYCS in April 2020 over the same period. The revised
commitments in the November 2020 TYCS update reflect the $2.67 billion increase the FY 2021 –
FY 2024 Capital Plan discussed above, along with project deferrals to the outyears, netting to an
increase of $6.44 billion over FY 2025 – FY 2029.
Among the new project IDs are 23 projects to support the City’s response to the pandemic. These
include $13 million for ventilator purchases, $5.2 million for X-Ray, CAT Scan, and ultrasound
equipment, together with $140 million for Centers of Excellence in Health + Hospitals (H+H) in
vulnerable communities. Prior COVID related capital spending includes $160 million for tablets and
iPads to support remote learning.
FY 2020 Capital Commitments
FY 2020 all-funds actual commitments totaled $8.06 billion. This represents an achievement rate
of 50.4 percent against the authorized plan of $16.01 billion contained in the April 2020 Executive
Plan, as shown in Table 21. This is a decrease of 26.7 percentage points from FY 2019, when the
achievement rate was 77.1 percent, and an 8.5 percentage point decrease from the average
achievement rate (58.9 percent) over the past decade.
The drop in achievement reflects the drop in construction activities due to the pandemic. Twenty of
the 25 program agencies saw their achievement rates drop from the previous fiscal year. The five
agencies with the largest percentage point drops in achievement rates are New York City Transit,
the Department of Homeless Services, the Brooklyn Public Library, the New York Public Library,
and the Department of Environmental Protection. 22 The drops in rates of achievement range from
(45.3) percentage points to (73.2) percentage points.
Only five of 25 agencies improved their achievement rates over FY 2019. The greatest
improvement in achievement rates were seen in the Department for the Aging, the Fire Department,
the Department of Sanitation, Department of Citywide Administrative Services, and Administration
22
Although the New York City Transit Authority is not a City agency, it is a distinct category within the Capital Commitment
Plan with a measurable Plan and recorded actuals against which to measure performance. Data contained herein are
from City support to NYCT from GO and TFA financing, not that of the Metropolitan Transportation Authority.
34 The State of the City’s Economy and Finances
of Children’s Services. The gains in achievement rates in these agencies ranged from
1.9 percentage points to 50.6 percentage points.
Table 21. Actual and Plan Commitments
FY 2020 FY 2020 FY 2020
Executive FY 2020 Achievement FY 2019 vs.
($ in millions) Plan Actuals Rates Actuals FY 2019
Dept. of Sanitation $264.3 $266.8 101.0% $285.5 ($18.7)
Fire Department 133.2 114.6 86.1% 102.7 12.0
NYPL Research Libraries 0.4 0.3 80.6% 31.3 (31.0)
Dept. of Educ./SCA 3,873.4 2,802.4 72.3% 3,993.5 (1,191.1)
Citywide Admin., Svcs. 720.7 467.7 64.9% 388.8 78.8
Dept. for the Aging 13.1 7.2 55.1% 0.4 6.8
NY Health + Hospitals 1,003.9 531.9 53.0% 459.4 72.5
Dept. info Tech & Telecomms. 102.0 52.8 51.7% 70.3 (17.5)
Admin. For Children’s Services 63.2 30.8 48.7% 33.4 (2.6)
Parks & Recreation 688.1 332.9 48.4% 537.1 (204.3)
Police Department 264.6 127.7 48.3% 194.4 (66.7)
Dept. of Transportation 1,529.4 702.1 45.9% 1,209.7 (507.6)
Dept. of Environ. Protection 2,270.8 1,029.4 45.3% 2,031.5 (1,002.1)
Health & Mental Hygiene 110.8 50.1 45.3% 67.1 (16.9)
CUNY 93.7 42.3 45.1% 77.3 (35.0)
Cultural Affairs 292.2 126.5 43.3% 216.9 (90.4)
Business Services 703.4 276.4 39.3% 397.4 (121.0)
Housing Pres. & Dvlpmt. 2,255.0 875.5 38.8% 1,810.9 (935.4)
Human Resources Admin. 77.1 23.0 29.8% 44.5 (21.5)
Queens Public Library 34.2 9.8 28.7% 21.0 (11.2)
Homeless Services 59.2 11.0 18.6% 47.0 (36.0)
New York Public Library 119.3 19.6 16.5% 48.0 (28.3)
NYC Transit 722.9 116.7 16.1% 432.9 (316.1)
Brooklyn Public Library 26.5 3.8 14.3% 46.2 (42.4)
Dept. of Correction 586.1 42.2 7.2% 57.9 (15.7)
TOTAL $16,007.6 $8,063.6 50.4% $12,605.1 ($4,541.5)
Financing Program
The November 2020 Financial Plan contains $41.26 billion of planned borrowing in FY 2021 –
FY 2024, as shown in Table 22. The borrowing is comprised of $16.29 billion of General Obligation
(GO) bonds, $18.53 billion of Transitional Finance Authority – Future Tax Secured (TFA FTS)
bonds, $5.65 billion of New York Water Finance Authority (NYW) bonds, and $788 million of TFA
Building Aid Revenue Bonds (BARBs) that are supported by State building aid revenues.
Table 22. November 2020 Plan Financing Program
Estimated Borrowing
and Funding Sources Percent of
($ in millions) FY 2021 – FY 2024 Total
General Obligation Bonds $16,293 39.5%
TFA – FTS Bonds 18,533 44.9
NYC Water Finance Authority 5,646 13.7
TFA – BARBs 788 1.9
Total $41,260 100.0%
SOURCE: NYC Office of Management and Budget, November 2020 Financial Plan.
Office of New York City Comptroller Scott M. Stringer 35
Total projected borrowing in the November Plan for FY 2021 through FY 2024 is $5.57 billion less
than the June 2020 Financial Plan. This is a result of decreases of $3.29 billion in GO borrowing,
$1.05 billion in TFA FTS borrowing, and a $1.1 billion decrease in NYW estimated borrowing. In
addition, projected TFA BARBs borrowing decreased by $140 million. The reduction in borrowing,
despite the increase of $2.67 billion in capital commitments, stems largely from the $7.94 billion
commitment shortfall in 2020 combined with other project deferrals, which result in a lower capital
cash flow need over FY 2021- FY 2024. Estimated total borrowing ranges from $7.95 billion in
FY 2021 to $12.02 billion in FY 2024, with an annual average of $10.32 billion over the period,
down from $11.71 billion per year in the June 2020 Financial Plan.
Debt Service
As shown in Table 23, debt service, net of prepayments, in the November Plan totals $6.75 billion
in FY 2021, $7.76 billion in FY 2022, $8.55 billion in FY 2023, and $8.90 billion in FY 2024. 23 These
amounts represent decreases from the June 2020 Financial Plan of $698 million in FY 2021,
$321 million in FY 2022, $242 million in FY 2023, and $319 million in FY 2024. Between FY 2021
and FY 2024, total debt service is expected to increase by $2.15 billion, or 31.8 percent. These
projections exclude debt service of the NYW, which is backed by water and sewer user fees, and
that of the TFA BARBs.
Excluding prepayments, FY 2020 debt service totaled $6.84 billion. 24 FY 2021 debt service of
$6.75 billion in the November Plan, adjusted to exclude prepayments, is projected to be $84 million
or 1.2 percent lower than FY 2020. The decrease is due primarily to GO refunding savings of
$246 million in FY 2021 offset by other projected baseline debt service increases of $162 million in
FY 2021.
Table 23. November Financial Plan Debt Service Estimates
Change % Change
FY 2021 – FY 2021 –
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 FY 2024 FY 2024
GO $3,655 $4,178 $4,458 $4,741 $1,086 29.7%
TFAa 2,892 3,381 3,864 3,967 1,075 37.2%
Lease-Purchase Debt 125 125 148 118 (7) (6.1%)
TSASC, Inc. 82 76 76 76 (6) (7.3%)
Total $6,754 $7,760 $8,545 $8,902 $2,148 31.8%
SOURCE: November 2020 Financial Plan.
NOTE: Debt service is adjusted for prepayments.
a
Amounts do not include TFA BARBs.
The $698 million decrease in FY 2021 is due to GO and TFA FTS savings of $355 million and
$343 million, respectively. The GO savings stem primarily from a refunding action which produced
savings of $246 million, along with a $71 million reduction in estimated VRDB interest costs and
$55 million of net savings from lower GO debt issuance in the first half of FY 2021. The decrease
in TFA debt service results primarily from $69 million of estimated VRDB cost savings along with
about $230 million of savings from the first-quarter refunding transaction.
In FY 2022 the reduction of $321 million is comprised of estimated GO savings of $135 million,
largely from the continued impact of lowered borrowing in the first-half of FY 2020 and estimated
VRDB interest cost savings. The remaining $186 million of savings is from TFA, comprised of
$141 million of refunding savings from the first-quarter transaction, $34 million of lower estimated
23
Includes GO, conduit debt, TFA PIT bonds, and TSASC.
24
Includes TSASC debt service of $82 million in FY 2020.
36 The State of the City’s Economy and Finances
VRDB interest costs, and $16 million from building aid revenues available to reduce TFA FTS debt
service.
Estimated savings in FY 2023 and FY 2024 of $242 million and $319 million, respectively, stem
from GO debt service savings of $184 million from the continued impact of lowered borrowing
assumptions in FY 2021 through FY 2023 and lower estimated VRDB interest costs, along with
TFA’s estimated savings of $58 million from lower FY 2022 and FY 2023 projected borrowing
amounts, coupled with decreases in estimated VRDB interest costs. FY 2024 follows a similar
pattern as FY 2023 with estimated GO savings of $227 million and TFA savings of $92 million.
Debt Affordability
Debt service as a percent of local tax revenues and as a percent of total-funds revenues are widely-
used measures of debt affordability. 25 In FY 2020, the City’s debt service was 10.7 percent of local
tax revenues. The November Plan projects debt service will consume 11.2 percent of local tax
revenues in FY 2021, 12.1 percent in FY 2022, 12.7 percent in FY 2023, and 13.0 percent in
FY 2024, as shown in Chart 8. The upward trend in the debt service to tax revenue ratio reflects
the disparity between debt service and tax revenue growth rates over the Plan period. Debt service
is projected to grow at an average annual rate of 9.8 percent from FY 2021 to FY 2024 while tax
revenue during this period is projected to grow 4.6 percent annually. 26
Chart 8. NYC Debt Service as a Percent of Tax Revenues
18% 17.2% Actuals Projected
16.7%
17%
16% 15.1% 15.3%
15% 13.7%
14% 13.3% 13.2% 13.0%
12.9%
13%
13.6% 11.5%
12% 10.9% 11.2%
10.7%
11% 12.2% 12.3%
10%
10.5%
9%
8%
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Fiscal Year
SOURCE: Office of the NYC Comptroller, Comprehensive Annual Financial Reports, FY 1992 – FY 2020, and NYC Office
of Management and Budget, November 2020 Financial Plan.
Debt service is also projected to grow at a faster rate than total revenue, which includes tax and
non-tax revenues, and Federal, State and other categorical aid, over the Plan period. As such, debt
service is projected to consume an increasing share of the budget. As shown in Chart 9, the City’s
debt service as a percent of all-funds revenues is estimated to be 7.3 percent in FY 2021,
8.3 percent in FY 2022, 8.8 percent in FY 2023, and 9.1 percent in FY 2024. The rate of debt
25
Debt service in this discussion is adjusted to exclude prepayments. For additional analysis of the affordability of the
City’s debt, see Office of the New York City Comptroller, Annual Report on Capital Debt and Obligations for FY 2021.
https://comptroller.nyc.gov/reports/annual-report-on-capital-debt-and-obligations/
26
Excludes TSASC debt service.
Office of New York City Comptroller Scott M. Stringer 37
service growth, including TSASC, over the Financial Plan period is projected to be 9.6 percent, far
outpacing the estimated total revenue growth of 2.2 percent by over 7 percentage points.
Chart 9. NYC Debt Service as a Percent of Total Revenues.
Actuals Projected
10%
9.6%
9.5% 9.1%
9% 8.9% 9.1%
8.9% 8.8%
8.2%
8.1%
8.1% 8.1% 8.3%
8% 8.7% 7.7%
7.7% 7.6% 7.7%
7.2%
7% 7.4%
7.0% 7.1%
6%
5%
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Fiscal Year
SOURCE: Office of the NYC Comptroller, Comprehensive Annual Financial Reports, FY 1992 – FY 2020, and NYC Office
of Management and Budget, November 2020 Financial Plan.
38 The State of the City’s Economy and Finances
V. Appendix
Table A1. November 2020 Financial Plan Revenue Detail
Change Annual
FYs 2021 – 2024 Percent
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 Dollars Percent Change
Taxes:
Real Property $30,852 $32,001 $32,863 $33,226 $2,374 7.7% 2.5%
Personal Income Tax 11,922 12,975 13,729 14,270 2,348 19.7% 6.2%
General Corporation Tax 3,444 3,850 4,069 3,960 516 15.0% 4.8%
Unincorporated Business Tax 1,765 1,753 1,889 1,980 215 12.2% 3.9%
Sale and Use Tax 6,766 8,089 8,667 8,916 2,150 31.8% 9.6%
Real Property Transfer 854 1,000 1,150 1,200 346 40.5% 12.0%
Mortgage Recording Tax 579 690 791 828 249 43.0% 12.7%
Commercial Rent 801 851 879 910 109 13.6% 4.3%
Utility 365 400 401 416 51 14.0% 4.5%
Hotel 255 560 647 659 404 158.4% 37.2%
Cigarette 27 25 24 23 (4) (14.8%) (5.2%)
All Other 839 833 833 833 (6) (0.7%) (0.2%)
Tax Audit Revenue 921 721 721 721 (200) (21.7%) (7.8%)
Total Taxes $59,390 $63,748 $66,663 $67,942 $8,552 14.4% 4.6%
Miscellaneous Revenue:
Licenses, Franchises, Etc. $680 $696 $696 $698 $18 2.6% 0.9%
Interest Income 12 10 10 12 0 0.0% 0.0%
Charges for Services 975 1,049 1,050 1,050 75 7.7% 2.5%
Water and Sewer Charges 1,720 1,561 1,558 1,557 (163) (9.5%) (3.3%)
Rental Income 245 243 243 243 (2) (0.8%) (0.3%)
Fines and Forfeitures 952 1,103 1,098 1,098 146 15.3% 4.9%
Miscellaneous 403 343 342 341 (62) (15.4%) (5.4%)
Intra-City Revenue 2,038 1,816 1,812 1,811 (227) (11.1%) (3.9%)
Total Miscellaneous Revenue $7,025 $6,821 $6,809 $6,810 ($215) (3.1%) (1.0%)
Reserve for Disallowance of ($15) ($15) ($15) ($15) $0 0.0% 0.0%
Categorical Grants
Less: Intra-City Revenue ($2,038) ($1,816) ($1,812) ($1,811) $227 (11.1%) (3.9%)
TOTAL CITY-FUNDS $64,362 $68,738 $71,645 $72,926 $8,564 13.3% 4.3%
NOTE: Numbers may not add due to rounding.
Office of New York City Comptroller Scott M. Stringer 39
Table A1 (Con’t). November 2020 Financial Plan Revenue Detail
Change Annual
FYs 2021 – 2024 Percent
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 Dollars Percent Change
Other Categorical Grants $1,065 $998 $988 $986 ($79) (7.4%) (2.5%)
Inter-Fund Agreements $696 $654 $656 $656 ($40) (5.7%) (2.0%)
Federal Categorical Grants:
Community Development $741 $290 $261 $261 ($480) (64.8%) (29.4%)
Welfare 3,607 3,437 3,437 3,437 (170) (4.7%) (1.6%)
Education 2,720 1,962 1,962 1,962 (758) (27.9%) (10.3%)
Other 3,889 1,305 1,271 1,265 (2,624) (67.5%) (31.2%)
Total Federal Grants $10,957 $6,994 $6,931 $6,925 ($4,032) (36.8%) (14.2%)
State Categorical Grants
Social Services $1,843 $1,816 $1,816 $1,816 ($27) (1.5%) (0.5%)
Education 10,848 12,252 12,705 12,705 1,857 17.1% 5.4%
Higher Education 283 283 282 282 (1) (0.4%) (0.1%)
Department of Health and Mental Hygiene 526 517 514 514 (12) (2.3%) (0.8%)
Other 1,442 1,417 1,415 1,464 22 1.5% 0.5%
Total State Grants $14,942 $16,285 $16,732 $16,781 $1,839 12.3% 3.9%
TOTAL REVENUES $92,022 $93,669 $96,952 $98,274 $6,252 6.8% 2.2%
NOTE: Numbers may not add due to rounding.
40 The State of the City’s Economy and Finances
Table A2. November 2020 Financial Plan Expenditure Detail
Change Annual
FYs 2021 – 2024 Percent
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 Dollars Percent Change
Mayoralty $149 $154 $150 $150 $1 0.7% 0.2%
Board of Elections 160 136 135 135 (25) (15.4%) (5.4%)
Campaign Finance Board 60 15 15 15 (45) (75.3%) (37.3%)
Office of the Actuary 7 7 7 7 0 2.6% 0.8%
President, Borough of Manhattan 5 5 5 5 (1) (10.2%) (3.5%)
President, Borough of Bronx 6 6 6 6 (1) (11.3%) (3.9%)
President, Borough of Brooklyn 8 6 6 6 (1) (15.2%) (5.3%)
President, Borough of Queens 6 5 5 5 (1) (20.1%) (7.2%)
President, Borough of Staten Island 5 4 4 4 (0) (8.2%) (2.8%)
Office of the Comptroller 110 110 110 110 0 0.0% 0.0%
Dept. of Emergency Management 315 29 29 29 (286) (90.9%) (54.9%)
Office of Administrative Tax Appeals 6 6 6 6 0 0.7% 0.2%
Law Dept. 240 237 241 241 1 0.3% 0.1%
Dept. of City Planning 45 42 42 42 (4) (8.6%) (3.0%)
Dept. of Investigation 51 46 46 45 (5) (10.6%) (3.7%)
NY Public Library — Research 31 30 30 30 (1) (2.8%) (0.9%)
New York Public Library 156 151 151 151 (5) (2.9%) (1.0%)
Brooklyn Public Library 117 114 114 114 (4) (3.0%) (1.0%)
Queens Borough Public Library 122 119 119 119 (3) (2.8%) (1.0%)
Dept. of Education 28,477 28,691 29,483 29,880 1,403 4.9% 1.6%
City University 1,235 1,206 1,268 1,288 53 4.3% 1.4%
Civilian Complaint Review Board 20 21 20 20 1 2.9% 1.0%
Police Dept. 5,043 5,240 5,280 5,280 238 4.7% 1.5%
Fire Dept. 2,147 2,079 2,093 2,093 (54) (2.5%) (0.9%)
Dept. of Veterans’ Services 6 6 6 6 (0) (1.8%) (0.6%)
Admin. for Children Services 2,684 2,642 2,643 2,643 (42) (1.5%) (0.5%)
Dept. of Social Services 9,493 10,040 10,040 10,040 547 5.8% 1.9%
Dept. of Homeless Services 2,241 2,052 2,053 2,053 (188) (8.4%) (2.9%)
Dept. of Correction 1,150 1,197 1,220 1,220 70 6.1% 2.0%
Board of Correction 3 3 3 3 0 3.9% 1.3%
Citywide Pension Contribution 9,820 10,454 10,426 10,198 378 3.8% 1.3%
Miscellaneous 9,348 11,707 11,779 12,552 3,204 34.3% 10.3%
Debt Service 4,059 4,303 4,605 4,859 799 19.7% 6.2%
T.F.A. Debt Service 2,612 3,381 3,864 3,967 1,354 51.8% 14.9%
FY 2020 BSA (3,819) 0 0 0 3,819 (100.0%) (100.0%)
FY 2021 BSA 632 (632) 0 0 (632) (100.0%) (100.0%)
Public Advocate 5 4 4 4 (0) (0.9%) (0.3%)
City Council 83 56 56 56 (27) (32.3%) (12.2%)
City Clerk 6 6 6 6 0 8.7% 2.8%
Dept. for the Aging 419 382 382 382 (37) (8.7%) (3.0%)
Dept. of Cultural Affairs 189 149 149 149 (41) (21.4%) (7.7%)
Financial Info. Serv. Agency 110 111 111 111 1 1.0% 0.3%
Office of Payroll Admin. 15 15 15 15 0 2.0% 0.7%
Independent Budget Office 6 6 6 6 (0) (0.4%) (0.1%)
Equal Employment Practices 1 1 1 1 0 4.4% 1.5%
NOTE: Numbers may not add due to rounding.
Office of New York City Comptroller Scott M. Stringer 41
Table A2 (Con’t). November 2020 Financial Plan Expenditure Detail
Change Annual
FYs 2021 – 2024 Percent
($ in millions) FY 2021 FY 2022 FY 2023 FY 2024 Dollars Percent Change
Civil Service Commission 1 1 1 1 0 4.7% 1.5%
Landmarks Preservation Commission 7 7 7 7 0 0.1% 0.0%
Taxi & Limousine Commission 54 56 57 56 2 3.4% 1.1%
Commission on Human Rights 13 13 13 13 0 1.6% 0.5%
Youth & Community Development 687 610 610 610 (77) (11.2%) (3.9%)
Conflicts of Interest Board 3 3 3 3 0 7.1% 2.3%
Office of Collective Bargaining 2 2 2 2 0 1.7% 0.6%
Community Boards (All) 19 19 19 19 (0) (0.8%) (0.3%)
Dept. of Probation 116 114 115 115 (1) (0.6%) (0.2%)
Dept. Small Business Services 276 147 138 137 (139) (50.3%) (20.8%)
Housing Preservation & Development 1,264 1,031 1,012 1,012 (253) (20.0%) (7.2%)
Dept. of Buildings 192 187 189 189 (3) (1.4%) (0.5%)
Dept. of Health & Mental Hygiene 2,140 1,726 1,706 1,704 (435) (20.3%) (7.3%)
NYC Health + Hospitals 1,307 1,192 1,175 1,184 (123) (9.4%) (3.2%)
Office of Administrative Trials & Hearings 49 51 51 51 3 5.1% 1.7%
Dept. of Environmental Protection 1,495 1,384 1,378 1,377 (118) (7.9%) (2.7%)
Dept. of Sanitation 2,071 1,744 1,750 1,749 (322) (15.5%) (5.5%)
Business Integrity Commission 9 9 9 9 0 3.4% 1.1%
Dept. of Finance 319 316 316 316 (3) (0.8%) (0.3%)
Dept. of Transportation 1,127 1,118 1,128 1,129 2 0.2% 0.1%
Dept. of Parks and Recreation 499 476 485 485 (13) (2.7%) (0.9%)
Dept. of Design & Construction 293 151 151 151 (142) (48.5%) (19.8%)
Dept. of Citywide Admin. Services 1,219 530 529 529 (691) (56.6%) (24.3%)
D.O.I.T.T. 646 549 553 553 (94) (14.5%) (5.1%)
Dept. of Record & Info. Services 12 16 16 16 5 40.8% 12.1%
Dept. of Consumer Affairs 41 41 41 41 0 0.2% 0.1%
District Attorney - N.Y. 134 125 125 125 (9) (6.6%) (2.2%)
District Attorney – Bronx 93 91 91 91 (2) (1.8%) (0.6%)
District Attorney – Kings 122 119 119 119 (3) (2.3%) (0.8%)
District Attorney –Queens 78 77 77 77 (1) (1.3%) (0.4%)
District Attorney - Richmond 18 19 18 18 0 1.2% 0.4%
Office of Prosec. & Special Narc. 26 25 25 25 (0) (1.3%) (0.4%)
Public Administrator - N.Y. 1 1 1 1 0 1.1% 0.4%
Public Administrator - Bronx 1 1 1 1 0 0.0% 0.0%
Public Administrator - Brooklyn 1 1 1 1 0 0.0% 0.0%
Public Administrator - Queens 1 1 1 1 0 0.0% 0.0%
Public Administrator - Richmond 1 1 1 1 (0) (0.9%) (0.3%)
General Reserve 100 1,000 1,000 1,000 900 900.0% 115.4%
Citywide Savings Initiatives 0 (22) (24) (24) (24) NA NA
Energy Adjustment 0 57 105 142 142 NA NA
Lease Adjustment 0 39 80 121 121 NA NA
OTPS Inflation Adjustment 0 51 106 162 162 NA NA
TOTAL EXPENDITURES $92,022 $97,421 $99,918 $101,376 $9,354 10.2% 3.3%
NOTE: Numbers may not add due to rounding.
.
42 The State of the City’s Economy and Finances
Office of New York City Comptroller Scott M. Stringer 43
1 Centre Street, New York, NY 10007
(212) 669-3500 • comptroller.nyc.gov
@NYCComptroller
2 The State of the City’s Economy and Finances
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