NYC Economic Forecast Goes From Dismal to Dire

Courtesy Gothamgirl's Flickr.

The city's budget outlook is worse than previously estimated, will likely worsen over the next several years, and any future economic recovery will take place at a slower rate than the rest of the nation, according to a sobering analysis of Mayor Bloomberg's preliminary budget by the city's Independent Budget Office. In testimony yesterday [pdf] before the City Council’s finance committee, I.B.O. director Ronnie Lowenstein bandied about fun words like "meltdown," and "founder," and "foreboding," while projecting that total tax revenues will have declined by $3.9 billion by 2010, even after Bloomberg's proposed sales tax increases are taken into account. And then there are the jobs, or lack thereof:

Although New York City began losing jobs in the middle of last year, it was not until the last quarter of 2008 that employment began to steeply decline. Overall, the city has lost 59,900 jobs since January 2008, with much deeper declines expected in 2009. The financial industry will be the hardest hit with job losses continuing into 2011, when they will reach nearly 77,300... The securities sector is expected to continue to gradually lose jobs through the third quarter of 2012, when they will total 50,900.

Lowenstein further prophesied that the city's recovery will lag behind the rest of the nation because the financial industry, which until recently provided a sturdy backbone for the region's economy, has broken its back. And "even when the national economy does rebound and the financial market revives, the financial industry is likely to be more highly regulated and employ less leverage, and therefore will almost certainly be less profitable."

City comptroller William Thompson Jr. also testified before the finance committee and, according to the Times, reiterated his proposal to increase the tax rate for city residents who make more than $500,000 a year to 4.3 percent and for those who make more than $1 million a year to 4.8 percent, up from the current tax rate of about 3.65 percent. Thompson said the plan could yield almost $1 billion in revenue this calendar year. But multibillionaires like Mayor Bloomberg prefer a sales tax, which Thompson says "disproportionately impacts the very New Yorkers struggling to make ends meet in the current downturn."

Bloomberg, who warned against taxing the rich over the weekend, shrugged off Thompson's proposal in his weekly radio program: "People say, ‘Oh, well, you know, if the income were redistributed throughout the system more fairly.’ I don’t know what fair means. You can argue that if you make more money, you deserve more money." Hizzoner concluded the broadcast by reading aloud from Atlas Shrugged while sipping decorously from a goblet of ambrosia as servants fanned him with palm leaves and massaged his weary temples.

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By John Del Signore in News on March 10, 2009 10:46 AM

Comments [rss]

Gothampc

"Hizzoner concluded the broadcast by reading aloud from Atlas Shrugged while sipping decorously from a goblet of ambrosia as servants fanned him with palm leaves and massaged his weary temples."

Obviously written by someone who has not read "Atlas Shrugged".

The book portrays government intervention as flawed. Bloomberg has expanded the Nanny State within NYC (no smoking in bars, no trans fat, etc).

John Del Signore

I have read it. As you say, it does portray government intervention as not only flawed, but ethically reprehensible, especially when it comes to taxing the obscenely rich to help the parasitical, undeserving rabble, who should really just go and die quietly somewhere if they can't start their own corporations, or at least be grateful for their wage slavery.

Guest

"wage slavery?"

How do you people come up with such bullshit phrases? That is an oxymoron coming from the mouth of an actual moron. Would you like to go back in time to the Deep South and ask those who were used as slaves what they would think about earning a wage for their work instead of lashes from the whip?

Gothampc

It's not that cut and dry. Bloomberg believes in using government to control those who are not obscenely rich. Atlas Shrugged believes in using as little government as possible.

handsomedevil

"You can argue that if you make more money, you deserve more money."

That's exactly the problem. Rich people see their big paychecks as a mirror of self-worth. An alternate universe in which they take home less is just inconceivable.

With the collapse of the financial sector and the real anger at the undeserving rich, I can really see Bloomberg losing, now. If the Dems can nominate a candidate who radiates competence it is theirs.

Nyctini11

So how long are we gonna stand around and let GW's twin aka Bloomberg run NYC into the ground?? Seeing as how GW ruined it for the nation, hmmmm maybe it's time we rethink this Tools business strategies & wake the Fock up.

TK

I bet Bloomberg's fanners and messagers arent even unionized.

VanessaNYC

I thought the last line was brilliant, especially the part about Ayn Rand. Oh my goodness, how I hate that woman.

FrankMartin

Brilliant? Trite, petty and self indulgent maybe. Well written maybe, but brilliant.

We send enough. By we I mean all of us. They waste half of what we send them. The idea of giving them more is sickening.

PS There is no chance my taxes are going up. I guess I'm only rich in other ways

Guest

That last sentence sounds like it came out of the mouth of a dumbass communist. God forbid that someone say something about people earning money instead of having it just given to them. Is a certain 'journalist' bitter that his paycheck is a paltry sum compared to Bloomberg's wealth? (insert sound of baby crying)

gtraindelay

Cowboys suck

Politburo

That they do.. but he makes a good point.

esmerelda fitzmonster

New York as the Thunderdome. Get used to it.

eyekantspel

anyone thinking we can tax our way to prosperity is wrong. we need to fix the pension system in this city. NYC spends 20k PER WORKER towards pensions; more $$ is spent on trying to prop up pensions than most services we think our taxes go to support.

drewo

eye - you are entering the realm of the unmentionable, the untouchable, the Entitlements. Our so-called "leaders" are afraid to go there - because there actually would be some backlash, and real work would be involved to re-work these entitlements.

So when the going get tough, you can count on our elected officials to run the other way.