New York City loses hundreds of billions in wealth as rich residents skip town
Many rich residents fled to the suburbs or vacation homes to escape the city
Sources tell FOX Business’ Charlie Gasparino that state and local governments are facing budget deficits amid the coronavirus pandemic and hoping for federal money to fill holes.
New York City’s total wealth has fallen by billions of dollars over the past year – amid a severe coronavirus outbreak that has driven the richest residents out of town.
According to a report from New World Wealth and Webster Pacific, the combined wealth in the Big Apple fell by $336 billion in the 12 months ending June 30.
New York City’s total wealth was valued at $2.66 trillion, compared with $3 trillion during the same period last year.
The Big Apple still remains one of the wealthiest cities in the world.
A decline in wealth across the U.S. was driven by job and income losses, a weakening property market, declining stock market returns and increasing household debt, researchers said.
NEW YORK’S WEALTHY TAXPAYERS MAY NOT RETURN, CUOMO FEARS
New York’s Democratic Gov. Andrew Cuomo has expressed concern about the loss of high-income taxpayers during the pandemic – which would exacerbate ballooning state and local budget holes.
“We’re trying to get people to come back,” Cuomo said during a press conference this week. “They’re not coming back right now. And you know what else they’re thinking, if [they] stay there, they pay a lower income tax because they don’t pay the New York City surcharge.”
NYC FACES DEEPENING TAX REVENUE HOLES
As previously reported by FOX Business, many wealthy individuals abandoned Manhattan for nearby suburbs, or other states entirely, to escape the densely-populated metropolitan area as it became an epicenter of the coronavirus outbreak earlier this spring.
Moving executives told FOX Business that the exodus from New York City during the past few months has been “insane.”
And many of the residents who have left belong to higher-income brackets. United Van Lines CEO Marc Rogers told FOX Business that the majority of residents moving out of Manhattan, 61 percent, are earning over $100,000.
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Meanwhile, tax collections in New York City dropped 46 percent in June, even while revenues generated in other parts of the state recovered. That decline follows a 32 percent drop in May and a 23 percent decline in April.
In May, the state’s comptroller said the economic devastation facing New York had not been seen since the Great Depression.