Reports

The Metropolitan Transportation Authority (MTA) continues to make progress on bringing back riders, but  ridership remains well below pre-pandemic levels, putting a major strain on its budget. The report highlights key areas of transit service — safety, reliability and frequency — where the MTA can take steps to improve riders’ experience and encourage their return, to effectively fulfil its mission and stabilize its fiscal position.

New York City’s $104.8 billion preliminary fiscal year (FY) 2024 budget has benefitted from better-than-projected revenue collections, the reallocation of unused federal pandemic relief funds and savings initiatives. The Comptroller's office assumes that a number of the fiscal risks the City currently faces will continue, increasing the planned budget gap to about $8.9 billion in FY 2025 and $13.9 billion in FY 2027, even when adjusting for stronger revenue collections.

Like many cities across the United States, New York City has adjusted its budget priorities during the COVID-19 pandemic to help address pressing needs. This report examines how the City’s spending priorities shifted during the pandemic, including increases to support education, public safety, quality of life improvements and social services, as well the risks and uncertainties that could impact these newly funded programs in the long term.

New York City’s fiscal year (FY) 2023 budget is projected to rise to $109.4, after transfers, but City finances could come under pressure amid a slowing economic recovery and an increase in demand for City services. For the upcoming FY 2024 preliminary budget, State Comptroller DiNapoli urges the City to provide a realistic and transparent view of the City’s revenue and expenses and take actions to close out-year gaps while maintaining critical services.

More than two years after the height of the COVID-19 pandemic in New York City, young people are still facing double-digit unemployment. There are currently over 70,000 unemployed young workers in the City, nearly two times as many as in 2019. Young men are struggling the most with nearly 24% remaining unemployed, significantly higher than in the rest of New York State and the nation.

The Metropolitan Transportation Authority (MTA) has long faced difficulties closing projected budget gaps, which have been exacerbated by the pandemic, necessitating an unprecedented level of federal funding to maintain service operations. The MTA had been previously encouraged to examine cost and revenue efficiencies but those alone are unlikely to close the more than $2.5 billion annual gap that will remain when federal pandemic relief is exhausted in 2025, forcing the MTA to lay out savings and revenue options for its stakeholders to consider.

New York’s "Big Five" school districts in New York City, Yonkers, Buffalo, Syracuse and Rochester received $8.6 billion in federal pandemic relief funds, but there are sizeable differences in how school districts are using the funds. New York City has directed a smaller share of its total allocation toward addressing the academic impacts of the pandemic. The City, and all districts, can improve reporting linking educational outcomes for all of its students with their use of these historic federal education funds.

Attrition outpaces hiring among New York City’s municipal workforce, which could have an impact on critical City services and programs. The City’s full-time workforce declined by 19,113 employees over the last two years, the largest decline in staffing since the Great Recession of 2008. Despite the City hiring over 40,000 new employees in the last fiscal year, City job vacancies stand at more than 21,000.

Ten years ago, Superstorm Sandy made landfall in New York, causing catastrophic devastation to Long Island and New York City. One of the key organizations involved in the recovery and the planning of responses to future climate events is the MTA, whose assets were substantially impacted by the storm. This analysis tracks MTA’s progress on projects focused on rebuilding and strengthening elements affected by Superstorm Sandy and discusses what more can be done to better protect the system from new disasters.

Following near-record profitability in 2020, securities industry pretax profits rose even further in 2021. As federal stimulus actions have wound down, profits in 2022 are returning to pre-pandemic levels. New York State and City are reliant on tax revenues from the industry and must be cautious in managing their budgets given continued uncertainty in the financial markets. Though national sector employment has grown recently, the City’s share of national sector employment continued to decline slightly.

Technology sector employment in New York City increased by 33.6% (43,430 jobs) from 2016 to 2021 to reach a record high of 172,570 jobs. The city’s private sector lost 3.3% of jobs during this same period. Businesses in the tech sector also grew, accounting for 22.3 percent of the City’s total private firms added during the same period. Most of these firms consisted of fewer than 10 employees and contributed to the citywide growth in microbusinesses during the pandemic.

Over the last year, the fiscal position of the MTA has deteriorated, as transit ridership continued to lag at the low end of the authority’s projections. The MTA has two years to bring back riders and rebuild fare revenue before federal aid runs out. In the meantime, it must develop plans to cover budget gaps that start at $2.5 billion in 2025.

The American Rescue Plan Act of 2021 provided $350 billion in additional fiscal relief to address the continued impact of COVID-19 on the economy, public health, and the finances of state and local governments, individuals and businesses. This report examines how New York City and other local governments across the country used the first of two partial payments of these funds, totaling nearly $224 billion.

Communities in the Rockaways were some of the hardest hit by the pandemic. Despite the challenges, local economic indicators have slowly improved as the pandemic has worn on, with the number of Rockaways businesses growing in 2020 and 2021. Since the City’s reopening following the height of the pandemic, local stakeholders in the Rockaways have made concerted efforts to promote economic recovery and improved environmental conditions, with a focus on mitigating the impact of extreme climate events.

MetroPlus Health Plan, a subsidiary of NYC Health + Hospitals (H+H), offers low cost to no cost health insurance coverage to eligible New Yorkers. In June 2022, enrollment reached a record high, which can be attributed to conditions and policy changes spurred by the COVID-19 pandemic. Changes in MetroPlus enrollment have a direct impact on H+H's financial stability. As more of its members choose H+H as a provider, the hospital system generates more revenue.

New York City’s fiscal position has significantly improved since June 2021. However, this was mostly due to unanticipated resources generated from a combination of factors that is not likely to occur at the same level again, and some factors have already begun to reverse. Total revenues are expected to decline by 9.4 percent in FY 2023 due to lower tax revenues and federal aid for COVID-19 relief. In total, OSC calculated risks to the City’s budget that could exceed $2 billion annually by FY 2024. The risk assessment grows to $5.9 billion in FY 2026, which could raise the budget gap in that year to nearly $9.9 billion.

The pandemic caused a dramatic drop in riders and ridership revenue for transit systems across the country, and the MTA was hit particularly hard. The MTA must continue taking creative measures to boost ridership, but stakeholders may have to come to terms with enhancing or identifying new sources of revenue, cost savings and efficiencies if the agency is to achieve a balanced budget once federal aid runs out.

New York City’s transportation and warehousing sector regained 82% of its pandemic job losses as of April 2022. The sector’s relatively strong job gains over the past two years were fueled by increased demand for moving goods rather than people during the pandemic. An explosion in e⁠-⁠commerce led the growth in the courier and messenger, and warehousing and storage subsectors, which now well exceed pre-pandemic employment levels.

New York City lags the rest of the State and the nation in restoring pandemic job losses and in rebounding to pre-pandemic levels of unemployment. The recovery has also been uneven, with high-wage economic sectors generally faring better than low-wage sectors. This report aims to understand the main differences in labor force participation among the City’s workers and the reasons for the City’s slow recovery when compared to rest of the State and the nation.

New York City’s FY 2023 Budget and April Financial Plan shows the city has benefited from stronger-than-anticipated tax collections, outsized federal grant revenue from relief programs, savings in pension contributions from extraordinary asset gains in FY 2021, and announced additional savings programs, including significant vacancy reductions. However, better-than-projected fiscal performance may be short-lived amid inflation, geopolitical tension and supply chain issues.