The city’s finances will take a big hit due to Hurricane Sandy, Comptroller John Liu warned this week.
The loss of economic output during and after the storm, combined with the cost of the cleanup and reconstruction — as well as lost revenue from tourism and lost productivity — will cost the city hundreds of millions of dollars.
The city lost 20 percent of its economic output due to the storm, he said. Lost productivity that could cost the city $100 to $200 million. Nevertheless, the comptroller said the city would recoup most of those losses.
“At least 10 to 20 percent of that lost economic output is gone permanently,” he said. “The rest the city will make up over time.”
Liu said $90 million has been earmarked for the city’s recovery, mainly for cleanup and reconstruction of broken infrastructure.
“On this front, we are hoping FEMA will be reimbursing a share of it,” Liu said, noting the agency will typically cover 75 percent of the cost, but he hopes Gov. Cuomo can push it to reimburse the city for more, perhaps as much as 100 percent.
He added that President Obama’s emergency declaration before the storm could help in that regard.
Liu also commented on the potential effect Hurricane Sandy could have on the city’s tourism industry, especially in the Rockaways, which may not be recovered by next summer.
“Summer is a big time for the Rockaways, and there are large portions of the boardwalk that have been obliterated,” he said. “And there are so many homes destroyed that the economy is going take a hit.”
He also noted that many tourists have been forced to cancel plans to visit the city in the storm’s wake, and said many of them will not come back.
Even though Hurricane Sandy hit in October, not a major time for tourism like the holidays or summer, Liu said it does not make a difference what time of the year the disaster occurred.
“Any time is a bad time for this,” he said.
Liu stressed that the effect on tourism is not a major concern for his office or the city as the recovery from the storm continues.
“Right now, getting citizens back on their feet is first and foremost,” he said. “Tourism is not a top priority.”
Even though the city has weathered huge, costly disasters before — such as the 2010 and 11 blizzards and the 9/11 attacks — Hurricane Sandy may rank worse because of the wide swath of destruction left behind, Liu explained.
“The blizzard did not result in permanent damage like Sandy or 9/11,” he said. “And even though the human toll was worse, the 9/11 attacks were localized. Basically, the entire southern border of the city was devastated by Sandy. There’s no budget contingency for this kind of storm, but I’m confident that the city overall can weather it.”
State Comptroller Tom DiNapoli has projected that the economic damage from Hurricane Sandy to the state could exceed $18 billion.
“These are difficult days for New Yorkers as we work to clean up and recover from the devastation caused by Hurricane Sandy,” DiNapoli said. “Lives have been lost, homes and property destroyed, and businesses large and small remain paralyzed across New York City, Long Island, the Hudson Valley and the greater metropolitan region.
“My office’s preliminary estimate of economic losses due to the storm ranges from $15 billion to $18 billion. Our daily infrastructure of highways, power, sewer and water – the elements of modern life that we take for granted – have all been altered by this storm. Though the rebuilding effort may offset some of these losses, we must continue to monitor what the long-term economic impact to New York will be.”
DiNapoli is projecting that state tax revenues, which are already $436 million below initial projections, will be affected in the short term. He will issue his outlook for the upcoming fiscal year next week.