SENATE REPORT LISTS ECONOMIC IMPACT OF SEPTEMBER 11th ATTACK

Nation�s Loss from Worst-Ever Disaster May Top $639 Billion

Monday, January 28, 2002

State Senate Majority Leader Joseph L. Bruno and state Senate Finance Committee Chairman Ronald B. Stafford today released a professional analysis of the impact of the September 11th terror attacks on New York�s government finances that also revealed the disaster�s true and enduring costs to our nation�s economy.

The report by the Senate�s professional economic finance consultants, DRI-WEFA, examined the national, state and New York City economies immediately before the attacks on the World Trade Center and the Pentagon, and compared it with economic projections from November.

It found an enormous loss in economic activity, jobs and income directly attributed to the Sept. 11th attacks, and the resulting plunge in tourism and consumer demand. DRI-WEFA projects that the national economy will lose $639.3 billion through 2003 as a direct result of the attacks and the ripple effects on the national and state economies. Additionally, the analysts project that 2 million jobs would be lost nationwide, including the 100,000 jobs already lost in New York State.

"It has often been said that the World Trade Center attack was an assault on America, and this report confirms the profound impact that the terrorists had on our economy and way of life," said Senator Bruno (R-C, Brunswick). "This report also makes clear that New York -- ground zero in this diabolical attack -- has suffered disproportionately and that the nation�s recovery is inextricably tied to our own."

"The Sept. 11 attack on the WTC, aside from its obvious physical and emotional scars, had a profound impact not just on lower Manhattan, but on the national, city and state economies as well," said Senator Stafford (R-C, Plattsburgh). "This analysis will help the nation to understand the enormous task we face in rebuilding not just our city skyline, but our national economy as well."

In New York, the DRI-WEFA analysis estimates that the World Trade Center attack created a $6 billion gap in New York�s state budget.

The DRI-WEFA analysts concluded that the effects of an already slowing economy, exacerbated by a weakened Wall Street, were dramatically accelerated by the September 11 events.

"Across the U.S., economic activity ground to a halt in the week of the attack, and as the dust settled, it was clear that consumers were in no mood for immediate spending," the report found.

The physical damage from the attack is unprecedented -- more than double the cost of the previous most expensive disaster in U.S. history, Hurricane Andrew, which caused $25 billion in damage in 1992, the report said.

Among the report�s other findings:

* JOB LOSSES: The report estimates that New York has lost 100,000 jobs, but will regain some 20,000 jobs during 2002;

* Over 70,000 of the lost jobs were in NYC -- one-third of which were in the critical financial services sector, which accounts for 13 percent of the city�s employment base;

* Estimates are capital gains declined 20 percent in 2001, while bonuses fell 42 percent. Bonuses are expected to grow 3 percent n 2002 while capital gains remain flat;

* 32,000 World Trade Center jobs that have "temporarily" relocated may never return to New York City, at least not before 2004;

* TOURISM: Statewide, the already cooling tourism sector was deeply wounded by the attack, resulting in 46,500 job losses, including 19,700 Upstate;

* Most tourist sector job losses are expected to return -- more quickly Upstate, and by 2003 in New York City; and

* New York City is expected to lose more than $4.6 billion in tourism spending through 2003.