As New York City officials fight to control the coronavirus this summer, it is clear the economic impact will be much longer: City’s property tax revenue is expected to drop by $ 2.5 billion next year, which It was the biggest decline in at least three decades.
The expected shortfall, expected by Mayor Bill de Blasio to be announced on Thursday, appears to be fueled by a decline in the value of office buildings and hotel real estate, which is expected to run out since the start. Outbreak Briefing on new budget figures
About half of the city’s tax revenue comes from real estate, and economic forecasts suggest the city budget will remain in a risky state for the foreseeable future.
The city will compensate for some of the losses with an additional income tax boost: “Rich Get Rich”, according to a slide from the Mayor’s upcoming presentation received by The New York Times.
But the city still has to cut spending elsewhere.
“This latest development shows that we need more real federal stimulus with direct local assistance than ever before,” said the mayor’s spokesman, Bill Neidhardt, “and that’s saying something.”
Gov. Deb Lazio and Gov. Andrew M. Cuomo, who are fighting the Trump administration for more federal aid, have expressed optimism that Joseph Arbai has. The President-elect Den Jr., along with a Democratic-led Congress, will be of great assistance.
Before Deb Lazio made the expected announcement, incoming Senate Majority Leader Chuck Schumer said he and Biden had reached an agreement to have the government cover the state’s expenses. And all cities involved in declaring disaster This past March, when the virus was first discovered in New York.
The move is expected to save about $ 2 billion for both the state and the city – money that Schumer’s office said could be used to. “Addressing the budget gap related to COVID”
And on Thursday, Mr. Schumer promised to come again.
“This is just a presentation of a better day ahead from Washington for New York,” he said. “When Biden as president and I lead most of the time, it gets better and better.”
Few, however, expect the federal government to fully meet the budget requirements of state and local governments.
In November, the city forecasts that the budget for the next fiscal year, starting in July, will include $ 31.8 billion of property tax income.
On Thursday, the city is expected to recalibrate those expectations by $ 2.5 billion.
“It is unprecedented,” said Jennifer Freeman, a spokeswoman for the state police bureau. “We don’t have a bigger record.”
(According to the City Hall, it’s difficult to compare the current property tax system to any time before the 1980s when it was thought.)
Although normal economic activity resumed in New York City. But it doesn’t necessarily result in a full-fledged office worker returning to the office building, many people are getting used to working from home.
As of late November, there were only 35 percent of Manhattan hotel rooms, according to STR, a company that tracks the hospitality industry, compared with 80 percent a year ago. More than 90 hotels have closed temporarily.
Manhattan’s retail sector, which was devastated by e-commerce before the outbreak, was also hit by lower rents and more empty storefronts.
In 2020, tenants rented office space in Manhattan just 20.5 million square feet, the lowest in at least 20 years, according to a recent report from real estate firm Savills.
“It will still take several quarters before workers come back to work seriously and can see the impact of this shift in demand due to work from home or new location strategies,” the report said. Savills’ latest said.