Review of the Estimates for the Impact of the September 11, 2001, Terrorist Attacks on New York Tax Revenues

GAO reviewed the New York City Office of Management and Budget and the New York State Division of Budget estimates of tax revenue losses attributed to the September 2001 terrorist attacks. Both offices estimated that the attacks would reduce anticipated tax revenues to the city and state in both fiscal years 2002 and 2003. The budget offices' estimates of the tax revenue losses have limitations, such as including some of the economic slowdown that was under way at the time of the attacks. Nevertheless, the tax revenue loss estimates for the 2002 fiscal year--$1.6 billion for New York City and $1.6 billion for New York State--appear to reasonably approximate the impact of the attacks on tax revenues. Precisely measuring the effect on economic activity and related tax revenues is inherently difficult. Such measuring requires disentangling the effect of the attacks from the effects of other events. As of June 2002, the federal government had authorized funds of $10.4 billion to New York to partly compensate for the economic losses attributable to the attacks, including $6.4 billion for debris removal and temporary housing assistance. Nonetheless, the specific amount of funding obligated solely to New York City has not yet been compiled.