New York’s Economy and Finances in the COVID-19 Era (March 4, 2021)


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

March 4, 2021 Edition

Selected Economic Trends

New York Unemployment Claims Show a Year of Economic Devastation

A year after the first case of COVID-19 was reported in New York State, the economic disruption caused by the pandemic remains severe. One key measure is the total number of New Yorkers claiming unemployment insurance (UI) benefits. As shown in the top line of the graph below, the figure remains elevated 11 months after the initial surge of job losses, with 2.4 million claims reported by the U.S. Bureau of Labor Statistics as of mid-February 2021.

Continuing Unemployment Insurance Claims, New York State, (February 2020 - February 2021)

Immediately before the pandemic hit New York, for weeks ending in late February and early March 2020, statewide UI claims averaged around 167,000. Those claims almost doubled to over 314,000, as the shutdown went into effect, starting a weeks-long upward spike that reached more than 3.1 million in mid-May. The historic peak of nearly 3.4 million claimants came in the last week of May 2020. The totals from May onward include claimants under the Pandemic Unemployment Assistance program (PUA) which provides benefits to individuals not traditionally eligible for unemployment assistance because of self-employment or certain other reasons. (Due to the PUA and other factors, the numbers of workers claiming unemployment benefits differ from the count of those officially counted as unemployed, which peaked in New York State at 1.5 million or 15.9 percent of the labor force in July 2020.)

The longstanding, regular State program of UI benefits funded by employer contributions was the only source of benefits for the first six weeks shown in the graph and continued to fund the largest numbers of claims into early August. (These payments were supplemented by additional federally funded benefits of $600 or $300 weekly for much, though not all, of the period shown.)

Pandemic Emergency Unemployment Compensation (PEUC), which provides continuing support to workers whose benefits would otherwise expire, became increasingly important starting in September, and PEUC claims soon surpassed those made under the regular State program. PEUC and PUA are entirely federally funded as part of the extraordinary relief and stimulus actions taken by Congress and the President.

New York's Labor Force Participation at Lowest Point Since 1984

The proportion of working-age New Yorkers who are actively in the labor force — the labor force participation rate (LFPR) — fell below 60 percent in 2020, to its lowest level since 1984.

Those who are counted as being in the labor force include both employed individuals and those who do not currently have a job but are seeking one. Working-age individuals may be out of the labor force because they are stay-at-home parents, persons with disabilities, caregivers, or full-time students, among other reasons.

Declining Labor Force Participation Rates, New York and U.S. (2007 - 2020)

New York’s participation rate has lagged the nation’s for well over a decade. As shown in the figure above, both the national rate and New York’s LFPR had been stable for five years before the pandemic struck, and each declined by more than a percentage point over the past year.

As shown in a previous update, the declining number of individuals in the workforce has been a key factor in lower unemployment rates in recent months. Those who leave the workforce, particularly for extended periods, may experience long-term impacts on earnings. Women and minorities have been disproportionately affected by the recent trend of workers leaving the labor force.

Economists who analyze labor markets have pointed to an aging population and other factors as potential reasons for the longer-term decline in labor force participation. A 2017 report by the Office of the State Comptroller, Labor Force Trends in New York State, noted that continued shrinkage of the labor force could inhibit overall economic growth and contribute to budgetary challenges for the State and local governments.

Fiscal Developments –  New York's State and Local Governments

Will Washington Provide Fiscal Relief for New York and Its Local Governments?

Potential budgetary relief for states and local government entities is among the key items being debated as the U.S. Congress and the Biden Administration negotiate the next federal relief and stimulus package in response to the COVID-19 pandemic.

Legislation passed by the House of Representatives on February 27 would provide $12.7 billion in unrestricted aid to New York State, according to the House Committee on Oversight and Reform, chaired by Representative Carolyn B. Maloney of New York. In addition, the bill includes an estimated $10.9 billion in budget relief for more than 1,000 local governments in New York, ranging from New York City to small towns and villages, according to the Committee. The City would receive an estimated $5.9 billion under the bill. These figures and those referenced below may change as a result of negotiations or other factors.

Among the largest counties outside New York City, the Committee estimates the following amounts of unrestricted aid would be distributed (see table below with estimates for all counties in New York State):

  • Suffolk, $286 million;
  • Nassau, $398 million;
  • Westchester, $188 million; and
  • Erie, $178 million.
Estimated Allocations for Counties
County Allocation
Albany County $59,251,007
Allegany County $8,939,066
Broome County $36,943,975
Cattaraugus County $14,762,423
Cayuga County $14,851,444
Chautauqua County $24,612,055
Chemung County $16,185,777
Chenango County $9,155,507
Clinton County $15,609,570
Columbia County $11,532,095
Cortland County $9,228,042
Delaware County $8,559,711
Dutchess County $57,061,769
Erie County $178,176,596
Essex County $7,153,619
Franklin County $9,701,459
Fulton County $10,353,304
Genesee County $11,109,103
Greene County $9,151,822
Hamilton County $856,456
Herkimer County $11,892,442
Jefferson County $21,301,628
Lewis County $5,099,947
Livingston County $12,201,783
Madison County $13,758,570
Monroe County $143,861,724
Montgomery County $9,546,110
Nassau County $397,704,320
Niagara County $40,588,761
Oneida County $44,349,332
Onondaga County $89,316,570
Ontario County $21,290,573
Orange County $74,656,743
Orleans County $7,826,022
Oswego County $22,715,479
Otsego County $11,538,301
Putnam County $19,068,559
Rensselaer County $30,781,603
Rockland County $63,184,770
Saratoga County $44,580,513
Schenectady County $30,119,285
Schoharie County $6,012,065
Schuyler County $3,453,558
Seneca County $6,597,194
St. Lawrence County $20,895,510
Steuben County $18,498,170
Suffolk County $286,377,671
Sullivan County $14,629,572
Tioga County $9,348,675
Tompkins County $19,817,182
Ulster County $34,439,190
Warren County $12,401,545
Washington County $11,870,139
Wayne County $17,439,042
Westchester County $187,641,831
Wyoming County $7,730,408
Yates County $4,831,723

Source: House Committee on Oversight and Reform

The Committee estimates that the City of Buffalo would receive $350 million under the House bill; Rochester, $207 million; Syracuse, $126 million; Yonkers, $89 million; and Albany, $85 million. Estimates for other larger cities and towns in New York appear in the table below.

Estimated Allocations for Larger Cities and Towns
Municipality Allocation
Albany $85,282,416
Amherst $15,533,802
Auburn $22,180,857
Babylon $27,248,859
Binghamton $48,316,814
Brookhaven Town $55,489,996
Buffalo $350,050,488
Cheektowaga $26,144,656
Colonie $8,883,979
Dunkirk $11,594,482
Elmira $30,830,515
Glens Falls $12,231,986
Greece $10,614,095
Hamburg $10,444,137
Huntington $21,611,929
Irondequoit $22,851,964
Islip $50,797,681
Ithaca $17,019,027
Jamestown $29,868,650
Kingston $18,662,668
Middletown $12,382,500
Mount Vernon $42,632,296
New Rochelle $36,186,060
Newburgh $21,759,826
Niagara Falls $59,477,053
Poughkeepsie $20,773,058
Rochester $206,828,044
Rome $25,939,899
Saratoga Springs $7,696,542
Schenectady $57,843,158
Syracuse $126,169,690
Tonawanda $42,406,749
Troy $45,598,010
Union $31,938,981
Utica $63,990,959
Watertown $22,953,022
White Plains $21,981,634
Yonkers $88,892,789

Source: House Committee on Oversight and Reform

The Committee also provides estimates for more than 950 smaller municipalities in New York State. A complete list of those estimates is available on the Committee website.

State's General Fund Balance Over $20 Billion

The State’s General Fund balance has been at historically high levels, over $19 billion, in recent weeks. The updated Executive Budget Financial Plan issued by the Division of the Budget (DOB) in mid-February projected that balance would be $20 billion at the end of February. As of February 26, the actual figure was $20.4 billion.

DOB has projected the State will end the current fiscal year on March 31 with a General Fund balance of $7.2 billion. Among other factors, that figure reflects the planned repayment of $3.4 billion in notes issued in 2020 for cash-flow purposes, and over $15 billion in local assistance payments estimated to be paid in March, including the release of not-yet-specified amounts previously withheld from municipalities, nonprofit organizations and other recipients. In addition, the updated Financial Plan indicates that $1.6 billion in debt service payments previously expected to be made in State fiscal years 2022-23 through 2024-25 will instead be made before the end of the current fiscal year. The end-of-year balance will also be affected by decisions on specific uses and timing of federal stimulus funds.

Comptroller DiNapoli Releases Analysis of Executive Budget

Comptroller DiNapoli said there are some positive developments for the State’s fiscal recovery from the pandemic, including higher than expected personal income tax collections and the prospect of significant aid from the federal government, in his review of the Executive Budget for State Fiscal Year 2021-22, as amended by the Governor. However, risks remain and could threaten the State’s fragile improvement. For the complete analysis, see the report.

Prior Editions

Additional Resources

Thomas P. DiNapoli

Subscribe for Latest Updates

The State Comptroller’s Office is committed to keeping New Yorkers regularly updated on the State’s economy and finances. Subscribe to get the latest update.