New York’s 2024 Economic and Budget Outlook: Post-Pandemic Reckoning for the City and the State
The past four years not only brought unprecedented economic upheaval to New York City and state related to the pandemic and its aftermath, but also a resumption of stark polarization in the well-being of New York’s population. New York’s employment recovery is incomplete, and while job growth is likely to remain moderate in 2024, the economic outlook for the year ahead has brightened considerably in recent weeks, as inflation has continued to cool and projections for a recession in 2024 have faded. For the state and city government, the improved economic outlook bodes well for revenue collections. The migrant influx and the winding down of federal pandemic fiscal relief pose significant, but not insurmountable, fiscal challenges.
2024 is a year of reckoning for New York City and New York State. It is a time to come to grips with the uneven and incomplete pandemic recovery, and also a time for the State to join the City in mapping out a coordinated response to the migrant crisis. It is not a time for austerity but a time for facing and addressing problems, and for the State to use its considerable fiscal resources (much of which have been generated by the city’s economic might) to shoulder more of the resulting fiscal burden.
The State should use a portion of its considerable $22 billion in budget reserves to increase financial aid to the City of New York, and some should be used to respond to rising poverty and economic hardships, both of which otherwise will undermine the state’s long-term economic performance. The State needs to craft better policies to improve the grossly inadequate compensation for the growing number of health care and social assistance workers whose pay is largely determined by New York State and local governments.
The City should also consider equitably fair proposals to raise additional revenues to moderate severe budget pressures, as it did in the early 1990s and in the wake of 9/11.