Transcript Slide 1

IBO’s Outlook for New York City
New York City
Independent Budget Office
Theresa J. Devine
Senior Economist
IBO’s Outlook for New York City
• Fiscal Outlook for New York City
• Economic Outlook for New York City
(as of late February)
• New Data
New York City
Independent Budget Office
Fiscal Outlook for New York City
• Greatly improved over 2005 fiscal year
Recovery of local economy
Real estate market
• Surpluses in 2005 and 2006
• Gaps appear in 2007-2009
New York City
Independent Budget Office
Expiration of temporary sales and personal
income tax increases
Continued growth of costs of Medicaid, debt
service, and pensions
Fiscal Outlook for New York City
(continued)
• Additional Risks:
Labor agreements with police, fire, teachers,
sanitation and correction officers unions – no
contract now
State and federal grants
Pension savings
Policy changes in Washington
Economy – federal deficit, interest rates, trade
deficit, etc.
New York City
Independent Budget Office
IBO Revenue Projections (millions of dollars)
2005
2006
2007
2008
2009
Change
11541
12403
13323
14405
15342
7.4%
Personal Income
5966
5752
5839
6277
6557
2.4%
General Sales
4358
4151
4301
4498
4699
1.9%
General Corporation
1756
1811
1862
1912
2007
3.4%
Unincorporated
Business
979
998
1045
1096
1151
4.1%
Real Property
Transfer
869
578
526
669
761
-3.3%
Mortgage Recording
949
610
499
603
664
-8.5%
Hotel Occupancy
255
275
294
316
336
7.1%
Commercial Rent
440
450
465
485
504
3.5%
29042
28900
29923
32045
33753
3.8%
55.7%
58.2%
59.6%
61.3%
62.3%
Tax Revenues
Property
Total Taxes
New York City
Independent Budget Office
% of Total Revenue
Major Sources of NYC Tax Revenue
$18,000
$16,000
$14,000
Millions
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$2005
2006
2007
2008
Year
Property
New York City
Independent Budget Office
Personal Income
General Sales
2009
Total & Major Sources of NYC Tax Revenue
40,000
35,000
30,000
Millions
25,000
20,000
15,000
10,000
5,000
2005
2006
2007
2008
2009
Year
Total Tax Revenue
New York City
Independent Budget Office
Property
Personal Income
General Sales
Major Shares of Tax Revenue for NYC
90.0%
80.0%
Percentage of Total
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2005
2006
2007
2008
2009
Year
Property
New York City
Independent Budget Office
Personal Income
General Sales
Sum
IBO Economic Forecast
2004
2005
2006
2007
2008
2009
Real GDP Growth
4.4
3.4
3.2
3.5
3.6
3.1
Non-farm Employment
Growth
1.0
1.7
1.4
1.1
1.4
1.4
Inflation Rate (CPI-U)
2.7
2.2
2.2
2.4
2.1
2.1
Personal Income Growth
5.1
4.2
4.4
4.7
4.7
4.6
Unemployment Rate
5.5
5.5
5.4
5.2
4.9
4.8
10-Year Treasury Bond
Rate
4.3
5.0
5.7
5.7
5.5
5.7
Federal Funds Rate
1.3
3.0
4.3
4.9
4.5
4.5
National Economy
New York City
Independent Budget Office
IBO Economic Forecast
2004
2005
2006
2007
2008
2009
Non-farm New Jobs
(thousands)
20.7
32.4
39.9
29.2
39.1
39.9
Employment Growth
0.6
0.9
1.1
0.8
1.1
1.1
Inflation Rate (CPI-U-NY)
3.5
1.9
1.7
2.2
2.0
2.1
327.7
347.2
365.0
384.6
405.2
426.3
6.0
6.0
5.1
5.3
5.4
5.2
48.50
49.68
50.92
52.11
53.41
54.72
NYC Economy
Personal Income ($ billions)
Personal Income Growth
Manhattan Office Rents
($/sq.ft)
New York City
Independent Budget Office
NYC Employment Forecast
February-05
2005
Per year
Total
32,400
148,700
37,000
Private
34,700
148,200
37,000
-200
-700
-200
-2,700
-4,000
-1,000
Trade, Trans & Util
700
-3,300
-800
Information
400
11,300
2,800
Financial Activities
1,900
8,700
2,200
Securities
1,500
5,700
1,400
Prof & Bus Services
10,200
46,500
11,600
Ed &Health Services
13,700
59,500
14,900
4,900
15,600
3,900
-2,300
-200
-50
Construction
Manufacturing
Leis & Hospitality
Government
New York City
Independent Budget Office
2005 to 2009
New York City
Independent Budget Office
New York City
Independent Budget Office
New York City
Independent Budget Office
New Payroll Employment Data
Total
Gain/Loss
Adjustment
2004-2003
-7,500
10,000
-10,200
13,400
Construction
3,800
-1,600
Manufacturing
1,800
-6,600
Trade, Trans & Util
1,600
4,500
-8,900
-2,200
Financial Activities
2,100
1,000
Securities
4,600
3,200
-9,000
800
Employment Services
-11,000
-1,600
Ed &Health Services
-1,600
8,400
1,600
8,200
-1,500
800
2,700
-3,500
Private
Information
Prof & Bus Services
Leis & Hospitality
Other Services
Government
New York City
Independent Budget Office
2004 Benchmark
New Payroll Employment Data
Dec04 - Dec03
as of Feb
Change
Total
33,800
18,700
-15,100
Private
38,600
22,000
-16,600
Construction
-1,400
200
1,600
Manufacturing
-6,300
-7,500
-1,200
Trade, Trans & Util
2,700
8,800
6,100
Information
6,500
800
-5,700
-800
1,800
2,600
2,200
3,000
800
14,500
-2,600
-17,100
Employment Services
6,100
-2,100
-8,200
Ed &Health Services
8,400
7,900
-500
Leis & Hospitality
9,400
10,200
800
Other Services
5,600
2,400
-3,200
-4,800
-3,300
1,500
Financial Activities
Securities
Prof & Bus Services
Government
New York City
Independent Budget Office
as of March
New York City
Independent Budget Office
New York City
Independent Budget Office
New York City
Independent Budget Office
NYC Employment: Financial Activities & Securities
600
500
400
300
200
100
0
1990
1991
1992
1993
1994
1995
1996
NYC Fin Act
New York City
Independent Budget Office
1997
1998
1999
NYC Securities
2000
2001
2002
2003
2004
US Employment: Financial Activities & Securities
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1990
1991
1992
1993
1994
1995
1996
US Fin Act
New York City
Independent Budget Office
1997
1998
1999
US Securities
2000
2001
2002
2003
2004
NYC Shares of US Employment: Finance & Securities
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
1990
1991
1992
1993
1994
1995
1996
Share Fin Act
New York City
Independent Budget Office
1997
1998
1999
Share Securities
2000
2001
2002
2003
2004
NYC Shares of US Employment
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
1990
1991
1992
1993
1994
Share Total
New York City
Independent Budget Office
1995
1996
Share Private
1997
1998
1999
Share Fin Act
2000
2001
2002
Share Securities
2003
2004
Conclusion
• IBO’s recent forecast was more optimistic
than our past forecasts
• Will new data make IBO even more
optimistic???
• Watch for our May Report on the Mayor’s
Executive Budget
New York City
Independent Budget Office