Reports

The Metropolitan Transportation Authority (MTA) has long faced difficulties closing projected budget gaps, which have been exacerbated by the pandemic, necessitating an unprecedented level of federal funding to maintain service operations. The MTA had been previously encouraged to examine cost and revenue efficiencies but those alone are unlikely to close the more than $2.5 billion annual gap that will remain when federal pandemic relief is exhausted in 2025, forcing the MTA to lay out savings and revenue options for its stakeholders to consider.

Attrition outpaces hiring among New York City’s municipal workforce, which could have an impact on critical City services and programs. The City’s full-time workforce declined by 19,113 employees over the last two years, the largest decline in staffing since the Great Recession of 2008. Despite the City hiring over 40,000 new employees in the last fiscal year, City job vacancies stand at more than 21,000.

The Office of the State Comptroller (OSC) prepares this report as part of the “Quick Start” process established in State Finance Law. The report includes revenue and spending projections through SFY 2024-25.

Ten years ago, Superstorm Sandy made landfall in New York, causing catastrophic devastation to Long Island and New York City. One of the key organizations involved in the recovery and the planning of responses to future climate events is the MTA, whose assets were substantially impacted by the storm. This analysis tracks MTA’s progress on projects focused on rebuilding and strengthening elements affected by Superstorm Sandy and discusses what more can be done to better protect the system from new disasters.

Over the last year, the fiscal position of the MTA has deteriorated, as transit ridership continued to lag at the low end of the authority’s projections. The MTA has two years to bring back riders and rebuild fare revenue before federal aid runs out. In the meantime, it must develop plans to cover budget gaps that start at $2.5 billion in 2025.

As State policymakers responded to the challenges of the COVID-19 pandemic and accompanying volatility in the State’s finances, New York ended the State Fiscal Year (SFY) 2021-22 budget on stable ground. 

The Annual Comprehensive Financial Report for the State of New York for the fiscal year ended March 31, 2022.

The Annual Comprehensive Financial Report for the New York State and Local Retirement System (the System or NYSLRS) for the fiscal year ended March 31, 2022.

The American Rescue Plan Act of 2021 provided $350 billion in additional fiscal relief to address the continued impact of COVID-19 on the economy, public health, and the finances of state and local governments, individuals and businesses. This report examines how New York City and other local governments across the country used the first of two partial payments of these funds, totaling nearly $224 billion.

This snapshot highlights the results for counties, cities, towns and villages that reported for local fiscal years ending (FYE) 2021. Overall, the influx of federal pandemic relief aid and rapid recovery of sales tax revenues were significant factors in lowering many municipalities’ fiscal stress scores in FYE 2021, especially for calendar year local governments.

New York City’s fiscal position has significantly improved since June 2021. However, this was mostly due to unanticipated resources generated from a combination of factors that is not likely to occur at the same level again, and some factors have already begun to reverse. Total revenues are expected to decline by 9.4 percent in FY 2023 due to lower tax revenues and federal aid for COVID-19 relief. In total, OSC calculated risks to the City’s budget that could exceed $2 billion annually by FY 2024. The risk assessment grows to $5.9 billion in FY 2026, which could raise the budget gap in that year to nearly $9.9 billion.

The pandemic caused a dramatic drop in riders and ridership revenue for transit systems across the country, and the MTA was hit particularly hard. The MTA must continue taking creative measures to boost ridership, but stakeholders may have to come to terms with enhancing or identifying new sources of revenue, cost savings and efficiencies if the agency is to achieve a balanced budget once federal aid runs out.

Certain New York State agencies experienced major spikes in overtime during 2020 and 2021, due to the COVID-19 pandemic, but most overtime was performed in agencies that have typically relied upon it. And while the pandemic does not appear to have prompted a ‘great resignation’ from the State workforce as of 2021, workforce reductions since 2012, and prior years covered by this report, have been accompanied by a notable boost in overtime.

After two years of extraordinary volatility in State finances, the State Fiscal Year 2022-23 Enacted Budget Financial Plan projects fiscal stability for the next five years and includes plans to bolster rainy day reserves significantly. However, this report identifies several revenue, spending, and sustainability risks that could disrupt the Financial Plan that should be monitored closely.

New York's local Industrial Development Agencies (IDAs) reported 4,262 active projects with a total value of $114 billion in 2020, an increase of $5.3 billion from the prior year, according to an annual report on IDAs.

The devastating job losses caused by the COVID-19 pandemic led to a record number of unemployment insurance (UI) claims in New York, necessitating borrowing from the federal government beginning in May 2020. Two years later, the State’s UI debt has remained stubbornly high despite steady employment gains and state tax rates that have already increased to maximum permissible levels. Absent federal or state significant action, interest costs will mount and employers federal taxes will also grow.

New York City lags the rest of the State and the nation in restoring pandemic job losses and in rebounding to pre-pandemic levels of unemployment. The recovery has also been uneven, with high-wage economic sectors generally faring better than low-wage sectors. This report aims to understand the main differences in labor force participation among the City’s workers and the reasons for the City’s slow recovery when compared to rest of the State and the nation.

New York City’s FY 2023 Budget and April Financial Plan shows the city has benefited from stronger-than-anticipated tax collections, outsized federal grant revenue from relief programs, savings in pension contributions from extraordinary asset gains in FY 2021, and announced additional savings programs, including significant vacancy reductions. However, better-than-projected fiscal performance may be short-lived amid inflation, geopolitical tension and supply chain issues.

The Comptroller is responsible for ensuring State and local governments use taxpayer money effectively and efficiently, including through the review of contracts. This year’s State budget allowed at least $11 billion in spending without a competitive process or the benefit of an OSC review. OSC’s oversight adds tremendous value, and contract review was completed in an average of just 5.3 days in 2021. A bill to statutorily restore certain OSC oversight authority for billions of dollars in contract spending should be enacted in this legislative session.

The personal income tax (PIT) is the single largest source of revenue for the State of New York, accounting for two out of every three tax dollars collected by the State. Accordingly, the State’s overall financial health and its ability to sustain investments in public services is linked to PIT collections. This report describes recent trends in personal income taxpayer filings between 2015 and 2019.