New York, NY — At a press conference I attended on Thursday May 21st at the NYC Comptroller’s Office, Comptroller Mark Levine discussed a report he issued that day examining the possible impacts artificial intelligence (AI) could have on New York City’s economy.
The Comptroller said the risk posed by AI in the next few years requires the City to bring the Revenue Stabilization Fund (the “Rainy Day Fund”) to 16% of tax revenues. Currently the rainy-day fund and the Retiree Health Benefit Trust hold 8.5% of projected FY 2026 tax revenues.
“There is no city in America more exposed to both the promise and peril of artificial intelligence than New York City. AI is already having an impact on our economy and we cannot afford to sleepwalk into this new age,” said New York City Comptroller Mark Levine. “The enormous uncertainty that AI presents our local economy is no excuse to not prepare. My commitment as Comptroller is to help New York City understand and shape the most dramatic technological revolution in our lifetimes.”
The report maps a range of scenarios that illustrate the economically transformative potential of AI’s adoption and is based on Moody’s Analytics reports and on original work. The first, with a 35% probability of occurring, is an AI-empowered economy that would boost productivity with limited economic disruption. The remaining scenarios are AI falls flat (25%), which would be marked by the AI investment boom fizzling out and markets retreating; job replacement (20%) where automation displaces workers faster than new jobs emerge; and a productivity boon (15%) where AI drives broad growth, wages and prosperity. The fifth scenario, an AI shockwave (5%), would result in rapid AI disruption and captures more adverse negative impacts on white-collar jobs.
The range of possible outcomes underscores the need for New York City to prioritize strengthening its rainy-day fund and developing contingency plans to prepare for disruptions to the job market and revenue losses. This will ensure it can be a true fiscal shock absorber that preserves core social services and sustain some additional needs of New Yorkers.
In April, Comptroller Levine issued a series of recommendations to bolster the City’s reserves, so they can properly cover expenses during an economic downturn. To meet the potential revenue losses during a recession, the Comptroller urged the fund’s balance sit at 16% of tax revenues – based on the impact of past economic contractions. The recommendations also called for stronger governance on when the funds can be used.
