John Aidan Byrne reports for the New York Post, March 9, 2019, that “As tax-fleeced businesses and individuals flee en masse, and city public spending surges into the stratosphere, financial analysts say…New York City is careening closer to all-out financial bankruptcy.”
Milton Ezrati, chief economist of Vested financial communication agency, said: “The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform. New York is already in a difficult financial spot, but it would be in an impossible situation if we had any kind of setback.”
Here are the troubling indicators of a looming financial disaster:
- New York state — and city — are ranked No. 1 nationwide in state and local tax burden.
- Property taxes, almost half of the city’s revenue, are rising faster than any other revenue source — squeezing businesses and forcing homeowners, already hit by federal property tax deduction changes, to relocate to lower-tax states.
- The top 1% of New York City earners pay some 50% of the city’s income tax revenue.
- Long-term debt is now more than $81,100 per household in New York City.
- Since Democrat Bill de Blasio (birth name Warren Wilhelm Jr.) took office as mayor, city spending has increased some 32% — triple the rate of inflation. But de Blasio wants to add $3 billion more in the new budget than the current $89.2 billion.
- The city’s long-term pension obligations have escalated as well, as its workforce has soared by more than 33,000 in the last five years.
Peter C. Earle, an economist at the American Institute for Economic Research, said: “New York City could go bankrupt, absolutely. In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt.”
H/t Big Lug
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