Income taxes withheld from paychecks earned by people who work in New York City rose 7.1 percent in the first quarter versus a year ago, indicating financial companies in the first quarter showed restraint in handing out cash bonuses, the city comptroller said on Friday.
City Comptroller John Liu said consumers showed similar caution when it came to spending as January to February sales tax collections only climbed 11.4 percent from a year earlier.
But the stock market's rebound in the fourth quarter of last year helped drive estimated income tax payments up 49 percent, he said in a report.
New York City's financial companies are the bedrock of its economy. But public outrage over Wall Street's bailouts pushed companies to pay employee bonuses in stock and options.
The switch from cash payments cost the state, whose economy also rises and falls with Wall Street's fortunes, about $560 million, according to Democratic Governor David Paterson.
New York state collected almost $34.8 billion from April 1, 2009 to March 31, 2010, a decline of nearly $2.4 billion or 5.7 percent from a year earlier, according to a source familiar with the results who requested anonymity.
The state starts its fiscal year on April 1. The state Tax Department said the tax data that includes payments made by the final April 15 deadline will not be issued until next week.
The city comptroller issues quarterly reports on New York City's economy.
(Additional reporting by Elizabeth Flood Morrow in Albany; Editing by James Dalgleish)