Mayor de Blasio’s carefree spending these last three years may be about to bite him (and the city) in the backside — as the local economy seems to be winding down.
“Last August I reported the economy had gone from a sprint to a jog,” says city Comptroller Scott Stringer in his latest economic update. Now, it has “slowed to a walk. After years of steady growth, we’re beginning to see real signs of an economic slowdown.”
Stringer cited weakening: a yearly rate of 1.8 percent in the last quarter of 2016, down from 2.8 percent the quarter before. Payroll jobs fell at an annual 1.2 percent rate, with losses in almost every sector. Commercial leasing activity and venture-capital investment also saw dial-backs.
All this as hourly earnings failed to keep up with inflation and joblessness ticked up to 5.6 percent (though Stringer says part of that is workers returning to the labor market).
“There are causes for concern,” he said, “and we need to be prepared.”
Trouble is, de Blasio hasn’t been preparing. Just the opposite: Since becoming mayor, he has grown the budget 18 percent (i.e., more than three times inflation) — handing out fat pay hikes to the municipal unions and taking the head count of city employees to an all-time high.
He’s been able to do that only because a robust local economy has thrown off enough tax revenue to keep City Hall afloat. Those days may now be over.
More bad news: De Blasio may soon have to deal with a rollback in federal aid, particularly if he can’t work out a deal with Team Trump on turning over illegal immigrants who break the law. Say hello to the city’s first fiscal gap in years . . .
When de Blasio unveiled his new $84.7 billion budget last month, we warned that booming spending and a bloated workforce “build in costs for the long term,” making it harder to deal with revenue shortages.
True, de Blasio is squirreling away some rainy-day funds. But will it be enough?
New York may be about to find out — the hard way.