In Preview of Things To Come, New York City’s Tax Revenues Plummet Along With Wall Street Bonuses

Wall Street bonuses dropped to $176,700 on average in 2022, the New York state comptroller’s office announced Thursday, While to many that number might seem substantial, it could spell trouble for New York City’s bottom line.The comptroller, Thomas DiNapoli, announced that bonuses took a 26 percent nose dive from 2021, when the average was $240,400.“Wall Street’s cash bonuses were expected to fall as several factors weighed on the securities’ industry profitability in 2022,” Mr. DiNapoli said in a statement. “A 26 percent decline brings the average bonus closer to what financial employees received prior to the pandemic.”Considering the median income for New York City households is about $75,000, according to 2021 census data, most New Yorkers could be forgiven for a lack of sympathy toward Wall Street’s bankers.The drop off in bonuses could mean trouble for the city’s budget, though, and potentially the state’s as well. Last fiscal year, the city collected about $5.4 billion from the securities industry, close to 8 percent of its budget.Taxes on the securities industry account for about 22 percent, or about $22.9 billion, of the state’s tax revenue last year, according to the comptroller’s office.“While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street,” Mr. DiNapoli said. “Employment in leisure and hospitality, retail, restaurants and construction must continue to improve for the city and state to fully recover.” A deputy research director at the Citizens Budget Commission, Ana Champeny, told the Sun that the city planned for a decline in bonuses of 23.4 percent, as opposed to the 26 percent actually reported.“The city should not experience a significant shortfall in personal tax revenue against the forecast,” Ms. Champeny said. “However, this is not to say the City is not experiencing a year-over-year decline in personal tax revenue.”Over the next two years, the city is expected to face a nearly $2 billion decline in revenue attributable to personal income taxes.According to Ms. Champeny, the city “faces long-term fiscal challenges including funding labor contracts and the city and federal fiscal cliffs.”“While the decline in bonuses should not adversely impact short-term tax revenue against the current forecast, the city needs to begin tackling these long-term challenges today,” she said.

In Preview of Things To Come, New York City’s Tax Revenues Plummet Along With Wall Street Bonuses

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