Lost tax revenue
A city that loses residents also loses tax revenue. This problem is particularly acute in New York, which taxes its residents higher than most other parts of the country.
On a per capita basis, the state of New York collected $12,751 in 2022, 79% higher than the national average and the highest among all 50 states, according to the CBC report.
Out-migration in recent years could create a shortfall in tax revenue in the years ahead. The city’s budget could see a gap ranging from $7.8 billion to $10.1 billion, according to the CBC’s estimates.
Faced with a gap in its coffers, city officials might have to make difficult decisions about how much they borrow or spend to manage city services. However, there are signs that the city’s population and aggregate income is growing, which could mitigate some of this gap.
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Learn MoreNew York’s population is growing
New York City Mayor Eric Adams recently announced that the city’s population decline was over and that the number of residents was on an upswing. The city’s population grew in 2023 and 2024 and stands at 8,478,000 people as of March.
International migration is a key reason for this reversal. While the city is losing some residents to other states, it’s gaining residents from other countries in recent years, according to the CBC report.
The growth in job opportunities has helped too. Since 2020, the number of healthcare and social assistance jobs in the city has increased by 27%, while jobs in financial activities, securities and transportation and warehousing also saw modest growth.
The pushback on remote work in recent years could have pulled more employees back to the city as well. If these trends continue, New York’s future may not be as gloomy as it once seemed.
"The numbers do not lie. Our city's best days still lie ahead of us," Mayor Adams said in the press release. "Jobs are at their highest levels in city history, crime is down across the five boroughs and people are coming back to the greatest city on the globe. New York City has emerged from the darkest days of the pandemic and continues to take leaps towards a brighter future. Believe the hype: New York City is back."
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