The Economic and Revenue Forecast for the Fiscal 2019 Preliminary Report addresses the City Council Finance Division’s economic and tax revenue forecast, and provides a snapshot of the City’s economy and the revenue budget. The Committee on Finance’s hearing on the Preliminary Budget for Fiscal 2019 is the Council’s first opportunity to examine the Administration’s proposals and estimates of expected revenues.
National Economy
Strong global demand and a falling dollar is fueling exports and capital investment. This international trade is powering the US economy, which grew at a 2.6 percent rate in the between October and December of 2017. The strengthening economy also helps push unemployment down to the lowest level since the 2008 recession.
Employment 1.5%
Median Income $59,039
City Economy
The labor market is tight, with low unemployment and a historically high labor force participation rate. In this context, employment growth is expected to slow, but wage growth is increasingly widespread. Recent increases in the average wage were also aided by hikes in Wall Street bonuses and the higher minimum wage mandated by the State.
Employment 1.7%
Median Income $58,275
City Employment Changes by Sector
2016-2017
2017
Source: NYS Department of Labor
Revenue
The strong local economy is leading to strong returns for the personal income and unincorporated business taxes. The transaction and general corporation taxes are expected to be a drag on total collections, due to slowdowns in the real estate market and continued adjustments from recent City business tax reforms where many corporations had prepaid taxes.
NYC City Council Finance Forecast
Hardship Indicators
Although the labor market is tight and the recovery is finally reaching a larger share of the population, economic hardship is still widespread, and neither the rent burden nor the poverty rate have fallen to pre-recession levels in the City.
+12,985 in 2017
Rent Burden Rate, Citywide
Sources: Unemployment data from BLS Current Population Survey. GDP data is from Bureau of Economic Analysis. GCP and National Employment data are from IHS Markit. National Median Income is from US Census Bureau. City median income is from American Community Survey, estimates from the 2016 1-year survey. New York City employment and average wage sector data are from NYS Department of Labor.
Revenue breakdowns reflect the February 2018 Financial Plan Revenue Budget.
Poverty by borough and rent burden data are from ACS 1-year estimates. Rent burden rate refers to the percent of renters spending more than 35 percent of their income on rent.
The number for new residential units in 2017 reflects Council Finance calculations based on NYC Department of Finance FY2019 assessment roll.
Produced by the Council Finance Division and Council Labs