FOR IMMEDIATE RELEASE: April 5, 2005

Contact: Ben Allen (202) 225-4361

New Government Review of 9/11 Impact:

 

Attacks’ Aftermath Cost New York Upwards of $6 Billion in Tax Revenue

 

New York Still Suffering Unmet Needs &

 

Unpaid Bills From the Federal Government

 

GAO Review of Estimates of 9/11 Fiscal Impacts Requested by Reps. Serrano, Maloney, Rangel

 

WASHINGTON, D.C.: Today, three New York Members of Congress announced a new Government Accountability Office (GAO) report reviewing and evaluating recent estimates of the fiscal impact of the September 11, 2001 terrorist attacks on the economy of New York City and State. The GAO’s review re-confirms that the City and State still suffer as a result of 9/11, and that there has been no federal aid to offset the loss of this tax revenue. According to the GAO, the City has lost between $2.5 and $2.9 billion in tax revenue, while the State has lost $2.9 billion because of the September 11th terrorist attacks.

 

 

Reps. Carolyn B. Maloney (NY-14), Charles Rangel (NY-15) and José E. Serrano (NY-16) requested the report. Below are their comments, followed by a summary of the report’s key findings and a link to the full document:

 

 

“New York City continues to suffer from the effects of 9/11,” said Serrano. “The tax revenues lost because of that horrific event have meant hundreds of millions less dollars for
New York City
, which could have gone toward improving schools and helping families cope with the economic dislocations that stemmed from the attacks.  Unfortunately, no federal assistance has been allocated to address this loss in tax revenue.  The need is still there- what remains to be seen is whether the Administration and Congress have the compassion and willingness to help.”

 

 

“This report confirms again that the economies of New York City and State continue to suffer from 9/11 and continue to shoulder the burden of those losses without adequate federal reimbursement,” said Maloney. “While we will never know the precise economic impact of 9/11 on New York, there is a consensus that the damage was extensive and that some losses continue to this day, including ongoing loss of property tax revenue to the City and State.”

 

Maloney continued, “I hope this report will cause the Bush administration and Congress to increase the rate of mitigation aid that New York was provided after 9/11 and to repeal the wrongful taxation of 9/11 aid.  While the aid that New York has received from the federal government has been greatly appreciated, more must still be done to make New York’s economy whole from the terrorist attacks.”

 

 

Congressman Rangel, the Dean of New York State's Congressional Delegation, said, “This GAO report looked at all available estimates and found that they all agree - New York suffered billions of dollars in tax losses from the 9/11 attacks and has never been made whole. The truth of the matter is that it was not just New York, but all of America that was attacked on 9/11.  So, while we appreciate moral support, there comes a time when the Congress and the Bush Administration should keep the promise to share the burden of the 9/11 revenue losses with New York City and State.  Unfortunately, what were solemn promises in 2001 have become a litany of excuses in 2005.  It’s time for the excuses to end and the promises to be kept.”

 

 

 

A Summary of the GAO’s “September 11:

 

Recent Estimates of Fiscal Impact of 2001 Terrorist Attack on New York”

 

 

I. Continuing Impacts of 9/11 on New York Economy Are Significant

 

 

“The New York City Office of Management and Budget also projected that the city will forgo $400 million annually in personal income tax revenues in 2004 and 2005, mostly derived from the loss of an estimated 17,000 securities jobs” (Page 3).

 

 

Estimates from three recent studies by New York government agencies of forgone tax revenues as a result of the terrorist attack on the World Trade Center are, “$2.5 billion to $2.9 billion for New York City and about $2.9 billion for New York State” (Page 2).

 

 

II. No Federal Aid Provided for Lost City & State Tax Revenues

 

 

“According to the New York City agencies ... none of the federal assistance provided so far has been to directly compensate for the tax revenues estimated to have been lost as a result of the attack” (Page 17).

 

 

III. Economic Impacts Will Continue Until Rebuilding Complete

 

 

“Property tax revenues will continue to be lower than if there had been no attack, until the destroyed and damaged buildings are reconstructed” (Page 3).

 

 

IV. Job Growth Fell Considerably In Four Months Following 9/11

 

“Although job growth began to slow well before the attack, it declined noticeably in the 4 months after September 2001, particularly for New York City” (Page 4).

 

 

“In particular, employment in manufacturing declined by about 14 percent in
New York City
, compared with 9 percent in

New York

State

and 8 percent in the nation.” (Page 4-5).

 

 

“In addition, the financial sector grew about 1 percent in the United States but declined by about 9 percent in the city and about 6 percent in the state” (Page 5).

 

 

 

V. Economic Losses in Securities Industry Had Greatest Impact

 

 

“The securities sector was one of the hardest hit.  Although the decline in securities employment was not as great as in some other sectors, high wage rates for the sector meant a much larger decline in income.  For example, securities income fell by 28 percent in the first quarter of 2002 from the same quarter the previous year” (Page 8).

 

 

VI. Economic Impact of 9/11 Was Greater on
New York City
Than Elsewhere

 

 

“Because some jobs moved to other parts of the state, and to states like New Jersey and Connecticut, the net impact on New York State and the nation was less than on the city” (Pages 3-4).

 

 

VII. Discovery of Exact Economic Impacts of 9/11 Unlikely

 

 

“Although the recent estimates may be useful as general indicators of the relative magnitude of the attack’s impact, inherent uncertainties about projecting economic activity in the absence of the attack and data limitations prevent them from being precise indicators” (Page 11).

 

 

The GAO’s full report can be found at: http://www.house.gov/maloney/issues/Sept11/911Tax/040505GAO.pdf

 

 

Additional background:

 

 

Why wrongful taxation of 9/11 aid should be repealed:

 

http://www.house.gov/maloney/press/109th/20050314FEMAtax.htm

 

 

Legislative efforts to direct the federal government to provide greater mitigation aid to
New York
after 9/11: http://www.house.gov/maloney/press/108th/20030328WhateverItTakes.html

 

 

Assessing the overall federal response to 9/11:

 

http://www.house.gov/maloney/press/108th/20040825UnmetNeeds.htm

 

and

 

http://www.house.gov/maloney/press/108th/20040423FullAccounting911Aid.htm

 

     

 

# # #

 

Congressman José E. Serrano has represented the
Bronx
in Congress since 1990, and is the only Member of Congress from
New York City
on the House Appropriations Committee, where he serves as a senior member of the Homeland Security Subcommittee.