New York City's bank tax collections ran 48 percent above a year-ago, one of several taxes whose encouraging performance might give Mayor Michael Bloomberg some extra cash to spend in next year's budget.
"Bankers have done alright; that has been a pleasant surprise," said a source familiar with the data, one day before the mayor unveils his new budget plan.
New York City's economy rests on the shoulders of the financial industry and the rise in this tax bodes well for the banking industry. The source, whose back of the envelope calculations suggest the city might have an extra $150 million of revenue from several taxes, requested anonymity.
Bloomberg, who warns he might have to lay off thousands of workers because the state is slashing its aid by about $2 billion, raised his forecast for the bank tax in November. Even with the 48 percent increase, revenue is about $20 million below Bloomberg's forecast, the source said.
Fiscal monitors give Bloomberg high marks for repeatedly slashing spending to close a string of multibillion deficits. They fault him for negotiating overly generous pay packages with city workers.
Though the city is one of the nation's biggest issuers of municipal bonds and its approximately $65 billion budget tops that of a number of states, New York City pays lower interest rates on its debt than fiscally-stressed states, such as Illinois, California and New Jersey.
The mayor has recently taken a much harder line, demanding teachers relinquish benefits of seniority and police officers give up a $12,000 yearly payment for retirees that he calls a "Christmas bonus."
While the securities industry was exceptionally profitable in 2010, with the state comptroller saying it could be the second most profitable year on record, the city has yet to reap a bonanza in income tax payments from high-flying bankers and brokers.
"The income tax is only up about 2.5 percent," said the source..
A spokesman for the mayor, a political independent, declined comment.
Bloomberg often stresses the importance of the city's tourism industry because it offers so many entry-level jobs. His new budget plan for the year starting on July 1 will get the benefit of New York City's success in drawing visitors.
"The hotel tax numbers are very good, up about 18 percent," said the source.
Despite an economic recession and fears of bedbugs, New York City attracted a record 48.7 million visitors in 2010, making it the biggest tourist destination in the United States for the second year in a row.
One of the city's top-performing taxes also got a boost from the free-spending tourists: the city's sales tax is running about 13 percent ahead of a year-ago.