The Pandemic and New York City Finances: Emerging Challenges and Short-Term Responses

Abstract

In the United States, New York City became the epicenter of the coronavirus pandemic because of its high density and global connectivity, among other reasons. In addition to the loss of precious lives and livelihoods, the city is expecting significant budgetary hardships. This article examines the economic and fiscal impact of the ongoing pandemic in New York City. The article takes a closer look at the city government’s fiscal structure prior to the pandemic, emerging financial challenges in the revenue streams, elaborates on the policy response to manage the crisis. The preliminary assessment of the challenges suggests that recovery would be long-lasting and depend significantly on how soon the vaccinations resolve the public health situation and facilitate recovery. Until now, New York City and New York State have postponed hard budgetary decisions in anticipation of more federal assistance. The new political environment and federal policy stance may ease some strain on the city finances.


Keywords: New York City, COVID-19, Revenue Deficits, Budget Cuts, Debt Sustainability







The above map employs sources from USASpending.gov, U.S. Small Business Administration (SBA), and Health and Human Services (HHS).



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Public Finance Institute is a public finance research collaborative based in New York City seeks to engage with critical public policy and budgetary questions in domestic and international contexts. The collaborative works with researchers and policymakers to improve public finance practice and education.

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