State Comptroller Thomas P. DiNapoli has more bad news for New Yorks economy and fiscal outlook.
Last month, Mr. DiNapoli said that the states tax collections had fallen almost $260 million below spring estimates. He said then revenue would have to grow by 5.1 percent in the last five months of the fiscal year ending March 31 to balance the books, but that was before Superstorm Sandy. Gov. Andrew M. Cuomo has asked the federal government for assistance to recover from Sandy, which he estimates will cost $42 billion. That is far from assured, and the state is facing a $1 billion budget gap in fiscal 2013-14.
Now, Mr. DiNapoli predicts that Wall Street bonuses will fall to their lowest levels since the financial crisis began in 2008, according to the New York Post.
Although he did not have an estimate on the total amount of bonuses, Mr. DiNapoli estimated the average payout would be about $100,000, a drop of about 16.5 percent from last year. It would be almost half of what it was in 2006.
The financial industry is still coping with new government regulations in the slow economic recovery. It is a major economic engine that employs more securities workers than in any other state. Employment in the securities industry was down about 4,800 in May, and Citigroup has announced plans to lay off as many as 11,000 employees worldwide.
Revenue from Wall Street once provided almost 20 percent of state revenues, but that has dropped to about 14 percent. In addition, the spin-off effects are felt in restaurants, shops and other New York City businesses patronized daily by fewer Wall Street workers. But the impact will be felt throughout the state.
Declining revenues will make the task of closing the budget gap more difficult and could lead to cost-cutting that will be felt throughout the state in decisions affecting state aid to schools, local government assistance and state services at every level.