Volcker Alliance on Market Declines & NYC Revenue
New York, NY – Wall Street’s nosedive will likely force tough budget decisions in New York City Hall and Albany as projected declines in the financial industry’s record bonuses and near-record profits imperil city and state personal and corporate income tax revenues and a persistence of the work from home trend that started with the COVID-19 pandemic threatens city property tax collections. That is the message from New York State Comptroller Thomas P. DiNapoli, who today released his annual report, The Securities Industry in New York City report.
“The comptroller’s report shows that as market declines begin to impact revenue for New York State and New York City, both should go beyond year-to-year budgetary fixes to ensure fiscal stability for the long-term,” said William Glasgall, senior director, public finance, at the Volcker Alliance.
With the Standard & Poor’s 500-stock index down about 16 percent from a year ago, the comptroller’s report estimates that Wall Street bonuses will fall 22 percent from a record average of $257,200 in 2021. The drop will help fuel a fall in personal and corporate tax payments from the industry, which accounted for 8 percent of city and 22 percent of state tax collections in fiscal 2022. While the state does not impose a property tax, the report said that city office real estate and related levies face a “significant risk” if Wall Streeters continue to work from home.
“As lawmakers confront declining financial industry revenues as well as the end of federal COVID-19 budget aid in 2026, steps to ensure transparency, such as consolidated debt disclosure, should be prioritized,” Glasgall said. “Additionally, by adopting budget forecasting best practices that The Volcker Alliance continues to champion, these fluctuations can be better estimated and planned for in the future.”
The Volcker Alliance continues to encourage states and localities to improve budget transparency and fiscal sustainability by adopting their identified concrete examples of best practices of public budgeting.
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