The City's Independent Budget Office has projected that "the city will lose 243,000 jobs from the peak during the first quarter of 2008 and tax revenues will fall by $2.8 billion in fiscal year 2009 to $34.7 billion and then decline by $380 million more in 2010."

"Based on IBO's estimates of revenues and expenses under the November 2008 financial plan, adjusted for the tax measures adopted last month, we project that the budget gap for fiscal year 2010 has grown to $4.3 billion (10.4 percent of city-funded revenues). With little recovery of the local economy anticipated before the end of calendar 2010, we expect the fiscal year 2011 gap to reach nearly $7 billion (15.9 percent of city-funded revenues)," the organization's report said.

"IBO expects the U. S. unemployment rate to climb to 8 percent in 2009 as workers are laid off, and then climb further to 8.7 percent in 2010 as the number of workers seeking employment dwarfs new job opportunities in an initially weak expansion....New York City has lagged the nation in its entry to this recession, but as the global center of the financial industry, the city's economy is expected to turn down more sharply, stay down longer, and recover more gradually than the national as a whole....Whether or not major regulatory reforms are enacted, the financial industry that emerges from the current crisis is likely to be smaller, less highly leveraged, and less profitable. IBO forecasts profits in the security industry of $7 billion in 2009 and then about $10 billion per year in 2010 through 2012 - far from the near-record profit of $21 billion the industry enjoyed in 2006....While IBO forecasts slow employment growth for the financial industry starting in the second quarter of 2011, only one-fourth of the finance jobs lost in this recession are expected to return by 2012....With the housing market in disarray and credit conditions extremely tight, IBO forecasts a loss of 17,700 construction jobs (13.7 percent) and slow growth thereafter, as glutted real estate markets take time to clear....Although the 47 million visitors in calendar year 2008 was a record, IBO expects tourism to decline in 2009. Domestic travel began to contract early last year, while foreign tourism began to slow more recently, as recession spread abroad and the dollar began to recover value against foreign currencies. Revenues per hotel room in October and November were down 10 to 20 percent from the same months last year."

IBO predicted that the city's spending will grow will "substantially outpace revenue growth": "We project that total expenditures (city, state and federal funds) will rise from $59.6 billion in 2009 to $71.87 billion in 2012....This growth in spending occurs even as the Mayor and City Council have taken steps to reduce expenditures....As in past years, much of the growth in city spending is being driven by just a few discrete portions of the budget. Because these budget obligations are largely determined by long-standing agreements it is difficult to obtain significant savings in this areas, particularly in the short term."