The report released by the city's top financial manager says the attacks may have cost the city as many as 83,000 jobs.
City Comptroller William Thompson says the city and the nation will suffer the economic effects of Sept. 11 "for years to come."
The analysis finds that half of the city's projected $6 billion budget deficit is directly linked to the terror attack. That includes almost $3 billion in lost tax revenue.
Another report today about the economic fallout from the attacks. It finds that visitors from the U.S. spent nearly $1 billion dollars less in New York City last year than they did the year before.
Though the city was in a mild downturn before the World Trade Center was destroyed, Thompson said a likely economic rebound would have created 63,000 new jobs that now have not materialized.
The Bush administration has promised the city $21.4 billion in aid; so far, the city has gotten $2.7 billion. The attacks aggravated the already soft local economy, which has yet to regain its momentum. New York City's jobless rate in July stood at 7.7 percent, above the national rate of 5.9 percent. In July 2001, the city's jobless rate was only 5.8 percent.
Mayor Michael Bloomberg, at a news conference with Gov. George Pataki about the city's economic response to the devastation wrought by Sept. 11, said Washington probably came through with more dollars than was anticipated -- at the beginning. "Anything extra they want to throw our way is fine," he jested, before taking pains to explain that there was no easy cure for the city's problems.
"The terrorists are not going to win...(but) it is going to take a long time to work our way out of this," Bloomberg said, adding that anyone who expected an overnight recovery in the job market would be sadly mistaken.
Thompson told reporters that the federal aid, though helpful for the economy, will not be enough to spur a rebound. That is because the aid package is not all cash; it includes, for example, a series of tax breaks and gives the city the ability to cut costs by refinancing some of its debt.
The cost of the damage to New York City dwarfs the most expensive natural disaster in U.S. history, Hurricane Andrew, which hurtled across the Florida Peninsula south of Miami in 1992, killing 28 people and causing more than $25 billion in damage.
The city comptroller's report assumed the average person who worked in the World Trade Center -- where many financial firms were clustered -- earned $130,000 a year. If those employees had lived to retire at age 65, they would have earned a total of $8.7 billion for themselves and their families.
Thompson also estimated that it will cost $21.8 billion to replace the buildings, infrastructure and what he called "tenant assets" that were destroyed in the attacks.
Some 13 million square feet of prime office space were wiped out -- an amount equal to all the office space in Atlanta's or Miami's business districts.
New York City also will have to pay almost $500 million in overtime for cleaning up Ground Zero, Thompson said. The federal government will not reimburse the city for this overtime as well as some healthcare expenses for the workers.
The Republican mayor recently hinted that either taxes or fees will have to go up -- or the city will need more federal or state aid -- because it cannot cut spending enough to close next year's $5 billion budget gap.
New York City's need for tax dollars is one reason some politicians are reluctant to turn the whole 16-acre site into a memorial to the victims. "We may stay away from building in the footprint -- I don't think we can walk away from the site entirely," Thompson said. The term footprint refers to the nine acres where the twin towers stood.
The Republican governor, who is running for a third term, said that the five new teams of architects who will be selected to draft plans for rebuilding the World Trade Center site will not have to include all of the 11 million square feet of office space that the complex once housed.
A main reason that the six initial rebuilding plans were soundly criticized was that in trying to replace all the office space lost, they left too little room for a memorial to the firefighters, police officers and workers who were killed.