Coronavirus Spells Disaster For NYC's Economy, Workers Fear

NEW YORK CITY — The Triple Crown restaurant should have been roaring on a March afternoon, nestled as it is on Seventh Avenue just a stone's throw from Madison Square Garden.

But, as Broadway and the New York Philharmonic suspended its shows, the Stock Market shut down amid a nosedive and Mayor de Blasio declared a coronavirus state of emergency — all manager Joe O'Shea heard was silence.

"It’s pretty much a disaster," O'Shea told Patch. "We were supposed to have one of the busiest weeks of the year this week and now we’re going to have one of the quietest.”

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The "disaster" isn't likely soon to improve as a spike in confirmed cases of the new coronavirus Thursday spurred lawmakers to put strong limits on city businesses in an effort to stem the disease's spread.

All gatherings of 500 people or more have been banned in New York City under a measure announced Thursday by Gov. Andrew Cuomo. De Blasio followed up by cutting in half the legal occupancy of the city's bars and restaurants.

As New York City reeled from news that a ban on flights from Europe would stop bringing tourists and watched stock prices tumble so sharply Thursday morning that they triggered a complete Wall Street shut down, Patch spoke with Ana Champeny, director of City Studies at the Citizens Budget Commission, about what to expect.

"That kind of impact can cascade through the economy," Champeny told Patch. "We don't have examples on this scale."

To combat coronavirus, the city will likely need to amp up spending on health care and financial assistance to offset the damage to small businesses and the people they employ, Champeny predicted.

But New York could also face a decrease in revenue if more businesses do what O'Shea has done: cut staff hours.

Less income will mean less income taxes, which make up about 20 percent of the city's annual tax revenue, Champeny said.

And, since a large portion of income tax comes from New Yorkers earning more than $1 million who are likely investing cash, there could be a "substantial hit" if the market continues on its current track, Champeny said.

"The volatility is high due to capital gains," Champeny said. "This group can have a large impact."

"The loss of revenue to the state budget is incalculable," Cuomo said Thursday.

"You have no idea …. I don't see any possibility of state's being able to handle this without federal action."

As the City Council works to finalize the upcoming fiscal budget, the City Budget Commission is urging New York lawmakers to find government-wide savings or risk incurring tax hikes on already highly burdened New Yorkers.

The CBC and the City Comptroller's office have also suggested the city set up a valuable resource it does not have: a rainy day fund.

“The coronavirus underscores the need for the robust savings," said Comptroller Scott Stringer.

"We need more recurring agency savings and a budget cushion of at least 12 percent to hedge against unexpected economic downturns and protect our most vulnerable New Yorkers."

Among those more vulnerable New Yorkers are the city's street vendors who might be putting their health at risk to make ends meet in a faltering market, said Mohamed Attia of the Street Vendors Project.

“Street vendors, they cannot work from home," Attia said. "If that person takes a week or two off, that's gonna hurt his monthly income significantly. And I'm not sure if he can survive in this case.”

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This article includes reporting from Patch editor Brendan Krisel