NY financiers to reap $64 bln in bonuses in 2010
NEW YORK |
NEW YORK Jan 19 (Reuters) - New York's financial sector will pay an estimated $64.2 billion in bonuses this year, up from about $57 billion in 2009, though still around $19 billion less than the amount paid out in 2008, the state budget division forecast on Tuesday.
New York's economy is led by financial and insurance companies and Wall Street usually accounts for about a fifth of its tax collections.
But banks and brokerages are trying to quell public outrage over bonuses, partly by paying their workers with stock. That can delay the tax bill by as much as five years, Budget Director Robert Megna told the legislature.
In 2011, bonuses are expected to edge down to $61.9 billion before rising to $71.1 billion in 2012 and $75.7 billion in 2013, the state budget plan predicted.
Wages paid in New York fell 6.1 percent in 2009, largely because of a nearly 51 percent cut in finance and insurance company bonuses. That compares with a 3.3 percent wage decline for the entire nation. It was New York's biggest ever decline in wages.
New York state also relies heavily on capital gains taxes, which fell around 35.1 percent in 2009. Still, that was an improvement over the 52.6 percent decline in 2008.
Capital gains are expected to grow by 58.7 percent in 2010, the state budget plan predicted.
New York's economy went into a recession about eight months after the nation, and the state is seeing some early signs of a recovery.
This "implies that the state's downturn will have been about the same length as the nation's, a welcome departure from the pattern of the last 40 years," the budget plan said.
Governor David Paterson said New York's financial employees should brace for more layoffs.
The finance and insurance sector is expected to see the largest employment decline in 2010 of any economic sector at 3.1 percent, he said in his budget plan for fiscal 2011.
That comes after a 6.2 percent decline in 2009. (Reporting by Joan Gralla; Editing by Andrea Ricci)
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