Comptroller: Sandy cost estimate may hit $18 billion
Superstorm Sandy may wind up costing New York as much as $18 billion in economic losses, State Comptroller Thomas DiNapoli said Friday.
DiNapoli's office released the preliminary estimate for storm costs as ranging between $15 billion and $18 billion, based on previous natural disasters such as tropical storms Irene and Lee, but the comptroller stressed the initial assessment was speculative.
In an interview, DiNapoli noted the degree of disruption caused by the storm this week was similar to that suffered after the 9/11 terrorist attacks in 2001.
"Although 9/11 resulted in a terrible of loss of life, it was primarily focused for New York on Ground Zero and the immediate vicinity. In this situation we have multiple boroughs and multiple counties," he said.
Damage from the storm ravaged counties from Long Island, through the five New York City boroughs and Rockland and Westchester in the north.
DiNapoli said his office relied on economic models supplied by IHS Global, extrapolations from the state's experience with Irene and Lee, and its own budget and economic staff analysis.
The total cost of Irene was around $1.2 billion: The costs associated with that hurricane totaled $900 million for the state and its local governments, and another $250 million in public authority spending, according to the comptroller's office.
Federal assistance has already been announced to cover the full cost of emergency public transportation and power restoration. But DiNapoli said he supported the efforts of Gov. Andrew M. Cuomo, U.S. Sens. Charles Schumer and Kirsten Gillibrand and the New York congressional delegation for full federal reimbursement for all repair and recovery costs.
With state agencies -- such as the MTA -- and local governments that had been hit hard by the storm -- such as the city of Long Beach -- already facing financial stress before the storm hit, it was clear New York would need more federal assistance, DiNapoli said.
"New York can't do it on its own," he said.
"Our daily infrastructure of highways, power, sewer and water - the elements of modern life that we take for granted - have all been altered by this storm. Though the rebuilding effort may offset some of these losses, we must continue to monitor what the long-term economic impact to New York will be," he said earlier in a statement.
Looking forward, the storm would also likely impact tax revenue, DiNapoli said. Tax revenue collections were already off by $436 million from initial projections before the storm, he said, adding his office will next week issue an early outlook for the upcoming state fiscal year.
The preliminary review of economic sectors by DiNapoli's office also found:
Ongoing disruption of New York's financial sector is expected to be minimal. But because it accounts for about 14 percent of the state's tax collections and about 7 percent of the city's, any negative storm aftershocks could have significant implications.
Infrastructure, including highways, airports, seaports, sewer and water systems, was severely impacted and is still undergoing damage assessments. While much of the cost may be covered by insurance or federal assistance, damage would be in the tens of billions. Rapid remediation would reduce damage from the corrosive effects of water, pollutants and other factors.
The storm may prevent New York City from breaking last year's records for tourist spending and attendance if the recovery continues into the holiday season. New York City tourism is the city's fifth-largest industry.
Flooding of sewer and water systems and their overflows will exacerbate cleanup efforts and raise health concerns. Toxicity assessments may be required near contaminated sites such as Newtown Creek and Gowanus Canal. The full extent of environmental hazards is yet to be determined.
Mitigating the risks associated with future storms is essential, the office said. A 2010 report by the New York State Sea Level Rise Task Force projected sea level rise in the state's coastal regions of 2 to 5 inches by the 2020s. A coordinated effort is vital to address risks as more powerful storms are being predicted. Sandy produced a storm surge of 14 feet.
The comptroller has directed his staff to prepare a more comprehensive analysis of the economic impact on the city, state and local governments as more concrete information becomes available.