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A group representing some of Wall Street’s biggest titans says Gov. Kathy Hochul has her work cut out for her over the next four years following her election win. The state still faces struggles keeping and attracting business post-pandemic.
Partnership for New York City President and CEO Kathryn Wylde, whose organization’s executive committee includes JP Morgan’s Jamie Dimon and BlackRock’s Larry Fink, spoke with FOX Business about the group’s wish list as Hochul enters her first full term at the helm and the obstacles New York’s governor faces in achieving them.
New York Gov. Kathy Hochul waves during an election night event in New York City Nov. 8, 2022. (Timothy A. Clary/AFP via Getty Images / Getty Images)
Following Hochul’s victory over Republican challenger Lee Zeldin this week, Wylde issued a statement touching on PNYC’s priorities while expressing confidence in the governor’s willingness and ability to address them.
“The city’s business community looks forward to working with Governor-elect Kathy Hochul to maintain a strong economy and achieve a more competitive climate for developing and attracting talent and creating jobs in New York state,” Wylde’s statement said.
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“The next four years will involve fiscal challenges, while requiring additional state investment in affordable housing, expanded mental health services and workforce training,” she added. “It will require tough decisions on the part of the governor, who is definitely up to the job.”
Wylde told FOX Business New York City‘s economy was able to power through the past few years thanks to record profits fueling strong tax collections and federal pandemic assistance bolstering budgets like the city’s subway system.
But times have changed.
“The No. 1 issue will be the fiscal stability of the city and state as we go into a period where inflation and market volatility — or [what’s happening] in Ukraine, etc. — has resulted in Wall Street markets plummeting during 2022,” Wylde says.
A trader works during the opening bell at the New York Stock Exchange on Wall Street in New York City. (Angela Weiss/AFP via Getty Images / Getty Images)
She explained that, not only are Wall Street profits down, commercial real estate has lost over $400 billion in value and has a 20% vacancy rate. So both income tax revenues and real estate tax revenues for the next couple of years are going to be significantly below what budgets require.
Given these issues, Wylde says the question is whether state and local leaders will have the discipline to rein in spending.
“Particularly at the state level, where the legislature is eager to spend money we don’t have, the governor is going to be in a position of trying to manage expectations of spending that we may not be able to afford without a tax increase,” she says. “And we believe that a tax increase will drive business and talent out of the city.”
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Crime also drives talent out of a city.
The New York City Police Department is doing its job on the front lines with high arrest rates while prosecutions and convictions are low, Wylde says. The courts are under the jurisdiction of the state, and prosecutions are subject to state law.
An NYPD officer patrols the subway platform at the 36th Street subway station April 13, 2022, in the Sunset Park neighborhood of Brooklyn. (Michael M. Santiago/Getty Images / Getty Images)
The PNYC sees addressing mental health as a way to combat New York’s crime problems because there is a lack of facilities to treat people who need services. Many would-be patients end up on the streets due to a dearth of laws and procedures to keep folks in treatment facilities when they need it.
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Wylde says another major problem contributing to crime in the city is illegal guns and credits Hochul and New York City Mayor Eric Adams for doing a good job on that front.
But “what most people who use the subways are most afraid of is not guns,” she added, “it’s being pushed in front of a subway by somebody who’s mentally ill.”
