November 23, 2020
“Federal stimulus works, and New York City needs another, immediately.” – Mayor de Blasio
NEW YORK––Mayor Bill de Blasio today provided an economic update and released New York City’s November Financial Plan Update for Fiscal Year 2021 (FY21).
“Today’s figures make one thing clear: Federal stimulus works, and New York City needs another, immediately,” said Mayor Bill de Blasio. “From ramping up testing to investing in safe schools to feeding everyone in need, our priorities are clear: public health will drive our recovery. The federal government must do its part and pass a stimulus package that ensures our recovery can continue full speed ahead."
In February, New York City had a record low unemployment rate (3.4%) and 4.7 million jobs. In March and April, as the first wave of the pandemic struck and shutdowns began, the city lost approximately 900,000 jobs. From May to October, New York City recovered approximately 300,000 jobs, or one third of jobs lost in March and April. The unemployment rate as of October was 13.2%, down from 20.3% in June.
Federal fiscal stimulus has been critical to the recovery of both New Yorkers and New York City. Expiration of the stimulus, as well as the rapid spread of the virus, threatens the recovery. From April to September, New Yorkers received approximately $40 billion in stimulus benefits, including stimulus checks, unemployment benefits and Paycheck Protection Program loans to employers. But the benefits of stimulus are running out and private sector job growth is slowing: New York City's private sector gained 100,000 jobs in June, but only 15,000 in October.
Based on initial federal stimulus and its impact on revenue, the FY21 budget is now $92.0 billion and remains balanced. The budget includes the recognition of $3.2 billion in federal funds, $2.8 billion of which is COVID-19 related ($1.5 billion FEMA grants, $1.3 billion stimulus), and critical investments in school reopening and COVID-19 related programs.
The Plan achieves $1.3 billion in savings across Fiscal Years 2021 and 2022, and budget reserves are at $2.8 billion.
Budget growth is driven by FEMA reimbursable costs and other federal COVID-19 relief grant funding that the City used to save lives and keep New Yorkers healthy and safe, including:
The City avoided deeper declines in tax revenue collections over the first quarter of FY21 because of the beneficial effects of the first rounds of federal stimulus, which included unemployment benefits, tax rebate checks, and business loans. Specifically, the Budget recognizes $748 million in better than expected collections, primarily in personal income tax and business taxes.
The budget gap for FY22 is now $3.8 billion and must be balanced in the upcoming Preliminary Budget.
$1.3 Billion in Savings
The Administration has remained focused on savings and achieved $983 million in debt service savings over, $224 million in agency savings, and $116 million in central savings over Fiscal years 2021 and 2022.
The City has reached $722 million in labor savings in FY21. These funds are not included within the two-year savings plan.
New City Spending
New City spending of $767 million in FY21 and $10 million in FY22 is offset by $1.3 billion in savings across those same years and supports investments in school reopening and COVID-19 related programs. FY21 investments include:
Making Sure New Yorkers Have Access to Food
Maximizing Learning Opportunities and Keeping Students and Staff Safe
Promoting a Fair and Equitable Recovery
Helping More New Yorkers Access Mental Health Support
Read the November Financial Plan Update here.