New York City Independent Budget Office IBO’s Outlook for New York City Theresa J. Devine Senior Economist

New York City Independent Budget Office 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 Expiration of temporary sales and personal income tax increases Continued growth of costs of Medicaid, debt service, and pensions

New York City Independent Budget Office 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) Change Tax Revenues Property % Personal Income % General Sales % General Corporation % Unincorporated Business % Real Property Transfer % Mortgage Recording % Hotel Occupancy % Commercial Rent % Total Taxes % % of Total Revenue 55.7%58.2%59.6%61.3%62.3%

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office IBO Economic Forecast National Economy Real GDP Growth Non-farm Employment Growth Inflation Rate (CPI-U) Personal Income Growth Unemployment Rate Year Treasury Bond Rate Federal Funds Rate

New York City Independent Budget Office IBO Economic Forecast NYC Economy Non-farm New Jobs (thousands) Employment Growth Inflation Rate (CPI-U-NY) Personal Income ($ billions) Personal Income Growth Manhattan Office Rents ($/sq.ft)

New York City Independent Budget Office NYC Employment Forecast February to 2009Per year Total32,400148,700 37,000 Private34,700148,200 37,000 Construction Manufacturing-2,700-4,000 -1,000 Trade, Trans & Util700-3, Information40011,300 2,800 Financial Activities1,9008,700 2,200 Securities1,5005,700 1,400 Prof & Bus Services10,20046,500 11,600 Ed &Health Services13,70059,500 14,900 Leis & Hospitality4,90015,600 3,900 Government-2,

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office New Payroll Employment Data 2004 BenchmarkGain/Loss Adjustment Total-7,50010,000 Private-10,20013,400 Construction3,800-1,600 Manufacturing1,800-6,600 Trade, Trans & Util1,6004,500 Information-8,900-2,200 Financial Activities2,1001,000 Securities4,6003,200 Prof & Bus Services-9, Employment Services-11,000-1,600 Ed &Health Services-1,6008,400 Leis & Hospitality1,6008,200 Other Services-1, Government2,700-3,500

New York City Independent Budget Office New Payroll Employment Data Dec04 - Dec03 as of Febas of MarchChange Total33,800 18,700-15,100 Private38,600 22,000-16,600 Construction-1, ,600 Manufacturing-6,300 -7,500-1,200 Trade, Trans & Util2,700 8,8006,100 Information6, ,700 Financial Activities-800 1,8002,600 Securities2,200 3, Prof & Bus Services14,500 -2,600-17,100 Employment Services6,100 -2,100-8,200 Ed &Health Services8,400 7, Leis & Hospitality9,400 10, Other Services5,600 2,400-3,200 Government-4,800 -3,3001,500

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office

New York City Independent Budget Office 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