The Pandemic and New York City Finances: Emerging Challenges and Short-Term Responses

New York City became the early U.S. epicenter of the coronavirus pandemic primarily because of its high density and global connectivity. In addition to the loss of precious lives and livelihoods, the city is expecting significant budgetary hardships. This article examines the economic and fiscal impact of the ongoing pandemic in New York City. It examines the city government’s fiscal structure prior to the pandemic and emerging financial challenges in the revenue streams and elaborates on the policy response to manage the crisis. A preliminary assessment of the challenges suggests that recovery will be long-lasting and will depend significantly on how soon vaccinations resolve the public health situation. Until now, New York City and New York State have postponed hard budgetary decisions in anticipation of more federal assistance. The new political environment and federal policy stance may ease some strain on the city finances.