New York City Comptroller Stringer Releases Fiscal Year 2021 Popular Annual Financial Report

 

New York City Comptroller Scott M. Stringer released the Popular Annual Financial Report (PAFR) for Fiscal Year 2021, a complementary guide to the Annual Comprehensive Financial Report (Annual Report) released last month. The PAFR distills important information about local government and its finances for use by City residents from the Annual Report, using dozens of explanatory graphs, charts, and images to provide New Yorkers with an easy-to-understand 30-page roadmap to City government.

“This year’s PAFR is a transparent look into our City’s gradual but steady recovery from the pandemic,” said Comptroller Stringer. “New Yorkers are returning to the city they love, and employment and vaccination rates are on the rise—encouraging indicators of our progress. But the data show we have a long way to go to build back from the losses of COVID-19. The PAFR shows how taxpayer dollars are generated and spent to keep the City running and provide essential services during one of the most crucial chapters in our history.”

This is the seventh year the Comptroller’s office has released the PAFR report. This Fiscal Year 2021 report will be submitted for consideration for the Government Finance Officers Association’s Award for Outstanding Achievement in Popular Annual Financial Reporting, which recognizes conformance with the highest standards for preparation of state and local government popular reports. The City of New York has received this national award for the last six consecutive fiscal years.

New York City Economy Upended by COVID-19 Pandemic

• The New York City economy began the fiscal year still reeling from the dramatic recession brought about by the COVID-19 pandemic. Private employment stood at 3.36 million in July 2020, and the unemployment rate was 18.5 percent.
• As generally higher-paid office workers transitioned to remote work, unemployment was concentrated among lower-wage workers who had been providing in-person goods and services prior to the pandemic.
• The economy gradually reopened through the summer and fall with employment rising and the unemployment rate declining. The jobs recovery paused through the winter months, as a winter COVID surge brought indoor dining to a temporary halt and more New Yorkers stayed home. Recovery resumed in the spring and into the summer of 2021, as vaccinations helped bring the pandemic under control.
• The fiscal year ended with seasonally adjusted private employment at 3.59 million (an increase of 309,100 from June 2020) and the unemployment rate at 10.6 percent.
• Despite these improvements, private employment remained well below the pre-pandemic February 2020 peak of 4.1 million, and the unemployment rate remains well above the pre-pandemic rate of 3.7 percent – as well as above the 5.9 percent national rate in June 2020.
• New York City office vacancy rose from 102 million square feet at the start of the fiscal year to 128 million square feet at the end. Rising vacancies drove average asking rents down from $66.99 per square foot at the start of the fiscal year, to $65.36 per square foot at the end.

COVID-19 Response and Recovery Expenditures

• With the rollout of COVID-19 vaccines towards the end of 2020 and the subsequent drop in infection rate, along with Federal stimulus to provide fiscal relief to local governments, the City’s response to the pandemic in the second half of the fiscal year included vaccination efforts, restorations of previous budget cuts, and initiatives to aid small businesses and boost the local economy.
• In total, the City spent about $6.2 billion on these efforts in Fiscal Year 2021.

City Expenses

• Fiscal Year 2021 expenses were approximately $94.9 billion, a decrease of close to $5.1 billion from Fiscal Year 2020.

City Revenue

• In Fiscal Year 2021, tax revenues were approximately $69.7 billion, an increase of over $6 billion from Fiscal Year 2020.
• Real estate taxes had the most revenues, totaling over $31.4 billion, followed by personal income taxes at $15.8 billion.
• Personal income taxes increased due to an increase in non-wage income, resulting in particular from a very strong year in the equity markets.
• Other income taxes increased due to an increase in general corporation, financial corporation, and unincorporated business income taxes. The increase in general corporation taxes was due to record high profits in the financial industry. There was a substantial increase in financial corporation taxes due to a significant increase in audits.

Roadmap to the City Budget

• The PAFR includes an explanation of the City budget process as well as an explanation of the difference between the City’s “General Fund” – the main operating fund of the City – and other types of financial resources such as Capital and Debt.
• The PAFR also includes information on “Component units” such as the Health and Hospitals Corporation (H+H), Water and Sewer Authority, and the NYC Housing Authority (NYCHA) – legally separate organizations for which the City is financially accountable. This information is presented separately from the financial data of the City’s “primary government.”

City Capital Project Commitments

• New York City funds its capital projects using the Capital Budget, which is separate from the General Fund. The Capital Budget is exclusively used to fund capital projects and includes spending on City construction, purchases of land, buildings, and equipment. It is generally financed by the sale of government bonds.
• Capital Authorized Expenditures were sufficient to address the capital needs of The City for both current and future projects.

Peer-City Comparisons

• In 2020, New York City had 22.3 million tourists, outpacing Chicago, which had 16.3 million. Philadelphia welcomed 30 million tourists.
• Each City provides different types and levels of service for its residents. In FY 2020, New York City spent over $12,966 per resident, while Chicago spent $3,226 and Philadelphia spent about $4,848.
• This year, New York City received an Aa2 bond rating by Moody’s. New York City also has an AA rating from Standard & Poor’s and an AA- rating from Fitch.

To read the full Popular Annual Financial Report for 2021, click here.