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Updated Analysis Shows Billions More in Tax Losses for New York City

Posted on Mar. 25, 2020

An analysis by the New York City comptroller's office estimates that the city could lose up to $6 billion in long-term tax revenue because of the COVID-19 pandemic.

New York City Comptroller Scott Stringer (D) released an updated analysis March 23 that estimates a total of $4.8 billion to $6 billion in tax revenue losses for fiscal 2020 and 2021. The analysis is based on two scenarios of when the spread of the coronavirus could be contained and on a wider downturn of the overall economy caused by rapid job losses and business shutdowns.

The scenario predicting a tax revenue loss of $4.8 billion would have the spread of the coronavirus contained and the economic shutdown ended by May. The $6 billion tax revenue loss scenario is based on the premise that the pandemic would last until June or July and would have a slower economic recovery period.

Stringer previously estimated $3.2 billion in lost tax revenue over the next six months in a March 16 analysis that was based on the declines in specific economic sectors. The latest analysis predicts sharp declines for hotels, restaurants, and retail sectors.

According to Stringer, the revenue shortfall of $1.3 billion to $1.5 billion for this fiscal year could be offset with the city’s $2.7 billion forecasted budget surplus, but he warned that doing so would result in a larger gap in 2021.

Stringer urged the city's agencies to identify savings of 4 percent of their budgets as part of the “Program to Eliminate the Gap.”

“We are staring down a fiscal emergency and need the federal government to step up by injecting as much funding into our city’s economy as possible — our healthcare system, infrastructure, transit network, and so much more depend on it. And our City government must act immediately to protect our fiscal position so that we can continue to provide vital services for our most vulnerable New Yorkers in the face of this emergency,” Stringer said.

Stringer called for federal stimulus relief and also suggested cash relief, an increase in unemployment insurance, and improved emergency paid sick leave. He urged Congress to offer "forgivable loans" to nonprofits and small businesses in order to keep employees paid while they are closed.

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