NEW YORK — City Comptroller Scott Stringer is projecting the city could potentially miss out on $111 million in sales tax revenue per year if the work-from-home trend solidifies in the aftermath of the COVID-19 pandemic.
The projection, detailed in a report the comptroller’s office released Tuesday, calculates the losses by forecasting how often workers who live outside the five boroughs will commute into the city for in-person work, and how often city residents will work from home instead of heading into the office.
The report works under the assumption that “employees will spend on average three days at the office and two days at home,” which it bases on “recent surveys of City businesses.”
It refers to a January survey by PwC of 1,200 U.S. employees and 138 U.S. executives. That survey found that “68% of executives say a typical employee should be in the office at least three days a week to maintain a distinct company culture,” but “over half of employees (55%) would prefer to be remote at least three days a week once pandemic concerns recede.”
The report suggests that a culture where employees are working remotely for part of the week would result in a reduction in day-to-day spending that occurs at or around the office setting.
But the report also acknowledges that it’s not clear what the exact changes in spending will look like, because there is limited data on the changes in spending patterns associated with remote work. The report says it makes the “baseline assumption” that spending that would have occurred in or around the office will now take place at home “dollar-for-dollar.”
“In the case of City residents who work in the City, the impact of hybrid work is assumed to be revenue neutral as spending at the office is simply replaced with spending close to home which is still City spending,” the report suggests.
The report also finds that projected sales tax revenue in a scenario that is “assuming two days of remote work” would be less than 1.5% of the city’s expected $7.4 billion total sale tax revenue for fiscal year 2022.
At his morning press briefing, Mayor Bill de Blasio played down the potential impact of the work-from-home economic shift, saying it would be addressed “organically” in changes the city will see.
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