ALBANY – The wheels have officially come off the Wall Street gravy train.
Bonuses paid by financial firms to their New York City employees tumbled a record 44 percent in the last year, blowing a combined $1.3 billion hole in city and state budgets, state Comptroller Thomas DiNapoli announced yesterday.
The drop reflects the largest decline in the local bonus pool in more than 30 years and confirms the worst fears of state and city political leaders, who for years have bet on Wall Street gains to balance budgets.
Overall, financial firms paid out $18.4 billion in bonuses last year, down from $32.9 billion in 2007 and an all-time-high of $34.1 billion in 2006.
The size of bonus checks shrank, too, as financial firms wrote off massive losses and some top executives decided to forgo bonuses altogether.
The average individual bonus fell 37 percent to $112,000, the lowest level since 2004. Last year, bonus checks averaged $177,000.
“The effect of the lower bonus payments will ripple throughout the regional economy and could cost the state and city of New York significant tax revenue,” DiNapoli said.
The city collected $275 million less in personal income taxes due to the drop-off in bonuses last year, the comptroller found. The state, meanwhile, took a $1 billion hit.