NYC will take 3 years to come back: watchdog

Independent Budget Office predicts slump in real estate, other taxes into 2023

New York’s Independent Budget Office thinks a slump in tax revenue will last until 2023 (iStock)
New York’s Independent Budget Office thinks a slump in tax revenue will last until 2023 (iStock)

If you’re waiting for New York City to get back to its old self, don’t hold your breath.

The Independent Budget Office predicted Wednesday that the city’s economic recovery will be a drawn-out affair, affecting employment and real estate sales through mid-2023. The watchdog expects an $11.3 billion drop in tax revenue over that period, according to the Wall Street Journal.

In the property market, IBO anticipates taxable sales in 2020 will pencil out at about $59 billion, down from about $100 billion the year prior and the lowest amount since 2010. A modest revival is predicted in 2021: about $80 billion in taxable sales.

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There was a 31 percent decline in contracts signed for properties above $4 million compared to last year. (iStock)
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Aggregate market value for properties in fiscal 2022 — determined this year — will rise 0.9 percent, the smallest increase in a decade, the watchdog estimated. Still, the assessed value for tax purposes is forecast to grow by 4.1 percent.

There are other pain points. IBO does not see a federal bailout patching up budget holes before next year, something Mayor Bill de Blasio has long said is needed (an expects soon, as a result of Democrats winning Georgia’s two Senate seats Tuesday, he said yesterday).

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IBO also reported sales tax collections had fallen 5.6 percent, or $438 million. Next year, it anticipates a $367 million drop.

On the employment front, the agency said it would take more than three years for all the jobs to come back. After 878,000 were lost in the second quarter of 2020, about 20 percent returned in the third.

“But this optimism is tempered by the knowledge that the city and the world are still treading in unknown waters, with much about the coming months to be determined by the course of the pandemic,” the report said.

[WSJ] — Sylvia Varnham O’Regan