Financial Sector Bonuses Down 50%, Manhattan & NY State Hit Hard

Bloomberg reports that Wall Street bonuses could be down 50%, to 2002 levels. With the deleveraging process causing massive writedowns and readjustments to previously reported income, as well as a daunting economic picture for 2009, this comes as little surprise. Stats below for New York signal what other cities might also see:

New York City will lose 170,000 jobs between July 2008 and December 2010, and Wall Street bonuses will decline at least 50 percent this year to the lowest levels since 2002, the state and city comptrollers said today.

Wall Street’s losses, the credit meltdown and the national recession will contribute to city tax revenue falling 4.3 percent in the fiscal year that began July 1, city Comptroller William Thompson said in a report to be released Dec. 15. State officials have predicted a $47 billion budget gap over the next four years, including $1.75 billion for the year ending March 31, and $13.3 billion in the next fiscal year.

…Wall Street bonuses totaled about $28.7 billion in 2007. This year’s estimate of about $14 billion would make it the lowest since 2002’s $10.8 billion, said Michael Loughran, a spokesman for the city Comptroller’s office.

…The impact of Wall Street’s difficulties will spread throughout the economy, DiNapoli said. “In the good times we like to brag that for every Wall Street job we see two additional jobs created in New York City, and another job or job-and-a-half created in the downstate suburbs, so we see the reverse happening as well,” DiNapoli said.

State government will feel the impact of Wall Street’s problems more than the city because the financial industry has historically accounted for about 20 percent of the state’s revenue, compared with about 12 percent for the city, and because the state failed to plan for the slump, as the city did, DiNapoli said.