New York’s Economy and Finances in the COVID-19 Era

Thomas P. DiNapoli

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August 19, 2020 Edition

Selected Economic Trends

After Losing 24 Years of Job Gains, State Takes Initial Steps Toward Recovery

New York State’s total employment count hit an all-time high of more than 9.8 million in February, reflecting net gains of nearly 2 million jobs since April 1996. The COVID-19 pandemic dealt a body blow to the State’s economy, with combined losses in March and April wiping out 24 years of job growth, as shown in the chart below.

The April decline of more than 1.9 million represented the State’s largest monthly loss of jobs on record.

New York City lost 944,000 jobs from February to April, and recovered 12.9 percent (122,000) of those in May and June. February-to-April declines elsewhere in the State, and jobs regained in the following two months, were:

  • Long Island – 296,000 jobs lost, with 29.4 percent (87,000) recovered through June.
  • Hudson Valley region – 185,000 lost, with 24.6 percent (45,500) recovered.
  • Upstate – 519,000 lost, and 27.9 percent (145,000) recovered.

From February to April, the U.S. economy lost over 22 million jobs. It regained a third of those through June and added another 1.8 million jobs in July. July employment figures for states, including those for New York, are scheduled to be reported by the Bureau of Labor Statistics later this week.

Initial unemployment claims have declined sharply in New York and nationally in recent weeks. For the week ending August 8, initial claims in New York totaled just over 52,000. While still high by most historical levels, that figure compared to a peak of more than 394,000 for the week ending April 11.

One in Three U.S. Workers Now Telecommutes

Nearly a third (31.3 percent) of the nation’s workers were teleworking in June due to the pandemic, according to new data from the Bureau of Labor Statistics (BLS). An estimated 49 percent of employed Asian-Americans teleworked because of the pandemic, compared to 31 percent of white workers, 26 percent of black workers, and 21 percent of Hispanics.

Women are more likely to telework due to the pandemic than men, with 36 percent of all female workers compared to 27 percent of males working from home in June. Most such teleworkers are full-time employees, and workers with higher levels of educational attainment are more likely to have teleworked due to the pandemic. According to BLS, 15 percent of employed people ages 16 to 24 are teleworking, compared to 35 percent of workers ages 25 to 54 and 30 percent of those age 55 and over.

Given that teleworking is inherently impossible or of limited utility for certain kinds of jobs, many of which are comparatively lower-skilled and lower-paid, this sharp increase adds to concerns about the pandemic’s harmful impact on workers in certain industries. Variations in telework by racial and demographic groups raise such concerns, as well.

The new BLS data relate specifically to employees teleworking as a result of the coronavirus pandemic. Previously available Census data indicated that relatively small, though growing, proportions of the workforce were working at home before the pandemic. At least some if not most of these individuals likely continue to work at home in the era of COVID-19. As of 2018, according to American Community Survey data, 4.5 percent of employed New Yorkers aged 16 and over worked from home, compared to 5.3 percent nationally.

New York State’s Budget

State tax collections for April through July were down $3 billion from last year. Tax receipts for the first four months of the fiscal year totaled $26.4 billion, a decline of 10.2 percent from the previous year. The total was $343 million or 1.3 percent below projections in the Enacted Budget Financial Plan issued by the Division of the Budget (DOB) in April. On August 13, DOB issued its FY 2021 First Quarterly Update, reducing its projection for this year’s tax receipts from $75.5 billion to $74.5 billion.

Personal income tax (PIT) collections, by far the State’s largest source of tax revenues, totaled $18.9 billion through July. This year’s change in the tax filing deadline from April 15 to July 15 added significantly to the uncertainty regarding tax revenues resulting from the COVID-19 pandemic. As with overall tax receipts, PIT collections through the first four months were not far from DOB’s April projections, approximately $135 million or 0.7 percent above the April figure. July sales and use tax collections of $1.1 billion were 8.5 percent below those of a year earlier, the lowest year-over-year decline in such receipts since noticeable impacts on tax receipts from the pandemic first appeared in March.

The State’s General Fund balance was $14.2 billion as of August 7, compared to $14.4 billion on July 31. In addition, the CARES Act Fund, which is outside the General Fund, held a balance of just over $4 billion as of August 7. A total of $1.1 billion had been spent from the CARES Act Fund as of that date from the $5.1 billion in federal Coronavirus Relief Fund aid to the State. Spending to date included $791 million for non-personal service costs, mostly through the Department of Health, and $231 million for personal services, with more than half of that for the State Police.

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