NYC is facing a cost of $111 million in lost sales tax revenue as employees continue to work from home in favor of commuting to the office, amid an ongoing crime spike in the city blamed for deterring many from the city.
Comptroller Scott Stringer, 61, released a report on Tuesday detailing the expense of the remote work lifestyle, which he says will hit businesses that rely on workers – including Manhattan shops and cafes.
The reduction in sales tax revenue stems from the idea that the city’s workers have been spending more money near their ‘new’ workplace at home rather than the office.
The work-from-home lifestyle had boomed during the COVID-19 pandemic as safety and health precautions had prevented office employees from going into the workplace.
There is now no longer any city or state mandate forcing or encouraging workers to stay home, but many big firms have kept staff out of the office regardless.
NYC Comptroller Scott Stringer, 61, released an analytical report on Tuesday detailing an $111 million loss in sales tax revenue
The loss has been affected by the increased number in remote workers who are spending considerably more near their homes rather than near their offices
‘Our analysis shows that the pandemic has fundamentally altered the way people work, with far reaching implications on the city’s economy and tax base,’ Stringer said.
‘As remote work and hybrid work schedules keep many workers closer to home, small businesses in residential districts may see a boost from New Yorkers spending more in their neighborhoods.
‘However, the loss of foot traffic and lower sales may be severely felt by small businesses in the city’s commercial districts.’
The report also revealed that the city is expected to raise $7.4 billion in tax revenue in 2022.
This proposal comes from the idea that city employees will work at least two days from home, according to business reports.
‘While there may be some spending changes from taxable categories such as lunch at restaurants to tax-exempt purchases such as groceries, at the same time spending shifts could also occur from tax-exempt purchases, such as bus and subway rides, to purchases of taxable items such as home office goods,’ the report added.
Small businesses, however, are said to be affected due to the lower sales with a projected overall annual $1.2 billion loss for city business retail.
‘We must ensure that all our small businesses get the support they need in this economy; that means cutting red tape and making government more user-friendly, helping immigrant entrepreneurs scale up to new markets, and closing the digital divide so that brick-and-mortar small businesses can effectively compete with larger online retailers,’ he said.
Mayor Bill De Blasio, who has not seen the reports, is continuing to push workers to return to the office
Stringer’s analysis found that if about 500,000 city workers went to the office three days a week then the annual loss in sales tax would be a projected $146 million due to decreased retail demand, according to WCBS Radio.
The sales tax loss could face a reduction of $35 million ‘by increased demand from the 110,000 city residents who work outside the city and going forward will spend more time and purchase more in the city.’
Mayor Bill De Blasio, 60, said that he has not seen Stringer’s report but has addressed workplace concerns with COVID as he continues to encourage city employees to return to the office.
‘Many many businesses found what we found, that a lot of work is done best in person,’ de Blasio said at a briefing on Tuesday.
‘There will be some sense of how to handle the amount of remote that makes sense in the future, but it’s going to be less I believe than what we saw at the height of the pandemic for sure.’
De Blasio also cited the city’s efforts to bring employees back by administering the precautions necessary such as the vaccine.
‘This will be addressed in some ways organically by the changes that you’re going to see,’ he said.
‘And also, what are we doing? Getting everyone vaccinated … bringing back the life of the city. That’s going to also encourage people to want to come in.’
In addition to tax revenue losses, New York has been hit by a series of well-publicized violent crimes it is feared will deter workers and tourists from returning to the COVID-ravaged city.
Overall city crime has also seen 0.25 decrease in the last year
According to the NYPD, the city’s overall crime rate is down a quarter of a percentage point from 2020, although it is up in certain categories, such as assaults and rape, which is up 2.7 percent over last year.
Throughout the city, felony assaults are up 7.7 percent from the same time last year, and misdemeanor assaults up 6.1 percent.
Grand larcenies are also up 2.4 percent from last year, with grand larceny from automobiles up 14.5 percent.
And shooting incidents have increased 3.5 percent over last year, with a little over 1 percent more shooting victims.
A commuter was captured being stabbed by a man in the stomach at the turnstile at West 4th Washington Square Subway Station in Manhattan on October 2
Subway crimes have also seen a 58.6 percent increase between September and August.
Among recent shocking crimes include newly released footage of a stabbing in downtown Manhattan.
It saw a man captured stabbing a 26-year-old commuter at the turnstile at West 4th Washington Square Subway Station in Manhattan.
The commuter, who was stabbed in the stomach, was taken to Bellevue Hospital and was found in stable condition.
Another attack was reported on Monday as a 23-year-old man had his head smashed over with a glass bottle by another passenger during an argument at the nearby West 28th Street Station.
The victim was taken to a nearby Bellevue Hospital for treatment for lacerations on his face, neck and ear – he is expected to recover.