Reuters Market News
NYC personal income tax revenues down $323 mln
By Joan Gralla
NEW YORK, May 15 (Reuters) - New York City's personal income tax collections -- an important measure economists use to discern how much money city residents are earning -- plunged 20 percent during the first quarter from the year-ago period, the city comptroller said on Wednesday in a new report.
Personal income tax revenues, which are the second-biggest tax the city has, added up to nearly $1.297 billion, down $323 million from the $1.62 billion generated during the first quarter of 2001.
Many New York City residents are struggling because the World Trade Center attacks, which killed nearly 3,000 and cost 100,000 jobs, occurred after the economy had begun to weaken.
But some indicators used by Comptroller William Thompson showed that while the city still was in the fifth quarter of a jobs recession, the economy might have started to turn around.
For example, 22,400 payroll jobs were lost in the first quarter of 2002 -- but that was a slower rate of decline than the 68,800 payroll jobs lost in the fourth quarter of 2001.
While the comptroller did not release tax revenue data for April -- the biggest tax month of the year -- collections only fell short by $100 million, according to a financial source who spoke to Reuters on April 30.
Mayor Michael Bloomberg was a bit more pessimistic, telling New York City reporters that if he had known what April tax collections were when he proposed his $42 billion budget, he would have estimated total revenues at a couple of hundred of million dollars less.
"We stand by our projections," he said, but added the forecasts would be revised when there was more data.
Bloomberg was responding to a question about a separate new report by the Independent Budget Office of the City of New York, which warned on Wednesday that the mayor might have to slash his proposed budget even further.
"I can also tell you that if we don't get our costs under control, we will not be able to get through this year or the year after," Bloomberg added.
Previously, the Republican mayor has said that if the state and federal governments and city unions do not come through with $800 million of cost savings, another $500 million will have to be cut. Those contingency cuts would be on top of the $1.3 billion in reductions Bloomberg already has proposed.
The Independent Budget Office, which aims to serve the same function as the Congressional Budget Office, said that even if the City Council and Albany agree to all the gap-closing measures the mayor has proposed, there could be a $785 million shortfall in the new budget that starts on July 1.
Further, "IBO expects that the local economy will see virtually no growth in calendar year 2002 and only weak growth in 2003 through 2006," the agency said in a statement.
Leading indicators, however, look mixed, according to the city comptroller. Building permits rose, signaling the construction industry is on a rising trend. But the help-wanted advertising index was down. That means fewer employers are hiring.
In another bearish sign, Manhattan's commercial vacancy rates doubled to 10.4 percent in the first quarter from 5 percent a year ago.
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