Artificial intelligence could significantly reshape New York City’s economy in the coming years, prompting calls for the city to strengthen its financial reserves against potential job losses and revenue declines.
A new report released Thursday, May 21, by New York City Comptroller Mark Levine examines how artificial intelligence, or AI, may affect the city’s workforce, wages, tax revenue and major industries. The analysis is the first local assessment focused on the possible economic effects of rapidly advancing AI technology.
The report outlines several possible outcomes tied to AI adoption. The most likely scenario, with a 35% probability, projects an AI-driven economy that boosts productivity while causing limited disruption. Other possibilities include an AI slowdown in which investments fade and markets retreat, automation replacing workers faster than new jobs emerge and a productivity surge that drives stronger economic growth and wages.
“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. The enormous uncertainty that AI presents our local economy is no excuse not to prepare. My commitment as comptroller is to help New York City understand and shape the most dramatic technological revolution in our lifetimes,” said New York City Comptroller Mark Levine.
The report also warns of a less likely but more severe “AI shockwave” scenario, in which rapid technological disruption heavily affects white-collar jobs across the city.
The range of potential outcomes, according to the report, highlights the need for New York City to strengthen its rainy-day fund and prepare contingency plans for labor market disruptions and revenue losses.
Levine has recommended increasing the city’s Revenue Stabilization Fund to 16% of tax revenues. Currently, the city’s rainy-day reserves and Retiree Health Benefit Trust together account for about 8.5% of projected fiscal year 2026 tax revenues.
Stronger reserves would help protect core social services and support residents during periods of economic instability tied to AI-related disruptions.
Earlier this year, Levine also proposed stronger oversight measures governing when reserve funds can be used.
The full report, “AI and New York City’s Fiscal Future,” is available through the New York City Comptroller’s Office.
