New data show the New York metropolitan area is the largest contributor to America's gross domestic product, but its position at the top of the national ranking may be due more to the inclusion of neighboring economic powerhouses such as Greenwich and Stamford, Conn., than its own economic strength.
New York City actually is responsible for less than half of all economic activity in its own metropolitan area, the data show. According to the city comptroller's office, its economic activity constitutes 43% of the region's total economy.
Put together by Comptroller William Thompson Jr., who used calculations from his office and from the U.S. Bureau of Economic Analysis, the figures are troubling to business leaders, who say this is further evidence that New York City's economy is being drained by the lower taxes and financial incentives in neighboring New Jersey and Connecticut.
"It is a concern that the economic engine that is still driven by New York City is increasingly contributing to the tax base of Connecticut and New Jersey, and that we haven't captured more of that for New York," Kathryn Wylde, the president of the Partnership for New York City, an organization of business leaders, said yesterday.
She said the figures are especially noteworthy in light of a proposal by the Working Families Party to raise $200 million a year by requiring hedge fund and private equity fund partners to pay a city tax on income generated by investments. The plan is backed by a majority of the City Council.
Ms. Wylde said it would drive even more hedge funds to Greenwich.
The numbers were released yesterday in the comptroller's quarterly newsletter, Economic Notes. In it, Mr. Thompson's office didn't raise concerns about the city's accounting for less than half of the region's economy. It did argue that because New York City makes up 42% of the metropolitan area's population, that the city comprises 43% of the region's economic activity "is a reminder that our region's economy is very evenly dispersed and that its prosperity requires both a healthy central city and thriving suburban economies."
The newsletter said the ranking of metropolitan economies underscored the importance of the New York area to the nation's economy. In an accompanying statement, Mr. Thompson said the data, which tracks 2005's economic activity, should "prompt the federal government to consider the New York City metropolitan region when formulating its budget or implementing economic policies."
The New York City metropolitan area, which includes parts of Connecticut up to Bridgeport, as well as Long Island and northern New Jersey, accounts for 6.6% of the country's population while contributing 9.1%, or $1.129 trillion, of the country's GDP.
The Los Angeles metropolitan area came in second place, contributing 6.3% of U.S. GDP or $788.9 billion. Although the New York region has 7% more people than the Los Angeles area, New York contributed 43% more to the country's GDP.
Ms. Wylde said that in terms of showing the contribution that the New York region makes to the national economy, it was a positive finding. She said it was alarming that the city's influence in Washington did not match up with its economic activity, as is evident in the federal distribution of funding for homeland security and transportation.
The findings come on the heels of a study released last week by the New York branch of the Federal Reserve, which showed the greater New York area has a lower per capita gross domestic product than Trenton, N.J., or Casper, Wyo.
That study, however, defined the greater New York area as a smaller region than in the comptroller's report. The Fairfield County, Conn., area, which includes the cities of Stamford and Greenwich, came in first place, with an average of $74,261. The New York region, which came in at no. 15, had an average of $51,440.