NYC tops U.S. in private jobs, commercial property: state

Reuters News
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Posted: Mar 25, 2011 11:29 PM

By Joan Gralla

NEW YORK (Reuters) - New York City leads the nation in at least two areas: private-sector job growth and the commercial property market's revival, State Comptroller Thomas DiNapoli said in a report released on Friday.

Private employers have hired about 73,400 workers since November 2009, replacing about half of the jobs they cut in the recession, according to DiNapoli's report.

Still, the state's Democratic comptroller cautioned that the public sector is cutting jobs and the city's overall real estate market is clouded by a recent drop in home values.

"New York City already has the strongest commercial real estate market in the nation," he said, "and future prospects are encouraging, given job gains and increased business activity; however, residential home values remain at risk."

Like many cities around the nation, New York City gets most of its tax revenue from property taxes, and the city did not escape the harrowing national drop in real estate markets, which drove up foreclosures while freezing credit and construction.

A separate report issued on Friday by the Fiscal Policy Institute, a liberal think tank, showed that New York state outperformed most of the nation in two other categories.

Last year, state residents enjoyed the second-fastest growth in personal income -- 4.2 percent -- and the second- swiftest growth in net earnings -- 4.1 percent, it said.

"In fact, New York accounted for 12.9 percent of the national growth in net earnings last year - a disproportionate amount, compared to our 7.7 percent share of personal income," the Fiscal Policy Institute said. It added that a soon-to-expire personal income tax surcharge did not prevent this upswing.

Only Democratic Assembly Speaker Sheldon Silver wants to extend the tax surcharge; it is opposed by Mayor Michael Bloomberg, a political independent, Governor Andrew Cuomo, a Democrat, and Republican Senate Majority Leader Dean Skelos.

BIG APPLE STILL BRUISED

The recession's legacy in New York City -- as in many other parts of the country -- includes higher spending on social services and a huge deficit -- which Bloomberg's $65 billion budget plan for fiscal 2012 closes mostly with cuts.

The number of New York City dwellers on welfare rose 3.6 percent to 351,807 in January 2011 from January 2009, DiNapoli said. The price tag will rise around $72 million from 2009 to $561 million in the 2011 fiscal year that ends on June 30.

Fiscal stress can also be seen in the rising numbers of homeless people and those whose health care is paid for by Medicaid, which covers the elderly, disabled and impoverished.

"Last year, the annual number of people seeking shelter in the City reached 113,553 -- the highest number since fiscal 2002," DiNapoli's report said. In January 2011, 2.9 million residents got Medicaid -- up 14 percent from January 2008.

Other extra expenses that could hit the city include the spiraling cost of repaying debt; it could hit 13.7 percent of city fund revenue by fiscal 2015 from 11.1 percent this year, DiNapoli estimated. Debt outstanding may rise to $106 billion by fiscal 2015 from $87.1 billion in fiscal 2010.

And the city expects to pay an extra 50 basis points when it issues long-term debt in the first half of fiscal 2012.

New York City's $1 billion reserve to pay for expected changes in how it funds its pension contributions might prove too small, DiNapoli said. In fiscal 2010, the city's pension funds were only 70.9 percent funded -- down from 107.9 percent in 2001.

Still, the city's mayors traditionally underestimate tax collections to curb the City Council's spending. DiNapoli said Bloomberg's forecasts for property-tax collections from apartment complexes and buildings might be too low.

(Reporting by Joan Gralla; Editing by Jan Paschal)