From Reuters.com:
New York City's net personal income tax revenues plunged 51 percent in the first 24 days of April, compared with the same period a year ago, the city comptroller's office said on Monday.
New York City's economy has been hurt by the devastation of Wall Street, its largest hometown industry, following the collapse last September of Lehman Brothers Holdings and a series of bank mergers amid the credit crisis. In the month of March alone, for instance, Wall Street shed 3,100 employees, according to the state's Department of Labor.
U.S. states and cities, just like the federal government, usually see tax revenues surge in April because the month includes the April 15th annual tax deadline.
New York City often pays out more in refunds than it collects in taxes during April.
But "through April 24, payments were running 33.5 percent below those of April 2008, and refunds paid out were running 21.8 percent below those of April 2008," said a spokesman for Democratic City Comptroller William Thompson.
The state's economy rests on the city's shoulders because the city's financial sector pays about 20 percent of the state taxes. New York City is equally dependent on the financial sector, with economists saying that each high-paying Wall Street job creates service-sector employment ranging from one to three workers in a broad range of businesses from law firms to clothing stores and little gift shops.
Though the city's real estate market fended off much of the pain seen around the nation until late last year, the depth of its current fall was underscored by the state's mass transit agency.
"We're seeing it declining even faster and deeper than in the post-1987 deflating of the real estate bubble," said Gary Dellaverson, chief financial officer for the Metropolitan Transportation Authority, at a finance committee meeting.
On Oct. 19, 1987, the Dow Jones industrial average .DJI lost 22.6 percent in the largest one-day percentage decline in stock market history. Afterwards, thousands of Wall Street jobs were lost and some never returned.
Democratic Governor David Paterson, speaking to reporters, estimated the state's deficit next year at $2.7 billion.
The state will update its financial plan later this week, he said. New York City also should issue new estimates soon.
While there was a "significant" drop in state corporate tax revenues in March, followed by a decline in personal income tax collections in April, Paterson added that there were signs the economy might stabilize sooner than anticipated.
"However, there seems to be a projection later in the year that things may not be as bad as we first thought that they would be."