The coronavirus pandemic is projected to blow a $9.5 billion hole in New York City’s tax revenue collection, the city’s Independent Budget Office said Monday.
“The near cessation of much of the economic activity that propelled the city’s economic engine for years has dashed the city’s fiscal outlook in just a few months,” the office wrote��in a report.
The office expects 2020 tax revenue to be $2.9 billion, or 4.6%, lower than it forecast in February and 2021 collections to be $6.6 billion, or 9.9%, lower, for a combined shortfall of $9.5 billion.
New York City Mayor Bill de Blasio’s administration last month released a budget for fiscal 2021, which begins July 1. It estimated a $7.4 billion tax revenue hit over 2020 and 2021, which is prompting an array of spending cuts to education, health and social services, parks, sanitation and other agencies.
However, the Independent Budget Office said more actions, including drawing down on the city’s healthy amount of reserves, will likely have to be taken to balance the budget.
It is expecting a $544 million budget gap for this fiscal year and a $380 million shortfall for next year.
Noting that New York City is an epicenter of the pandemic, the office projects employment losses of 388,000 between April and June and another 58,000 in the following quarter in virtually every industry except construction, education and health.
Strong gains in employment and income aren’t expected until 2022. CNN