New York City on Tuesday continued to dig itself out from a snowstorm that dropped nearly 20 inches of snow in less than 24 hours. Sorting out the economic impact likely will take even longer.
Jason Post, spokesman for Mayor Michael Bloomberg, said that the rule of thumb is that every inch of snow costs $1 million to clean up.
Though that estimate is not scientific, if it holds true, with 19.8 inches of snow falling over two days, the storm would use slightly more than half the city's $38 million budget for snow removal in fiscal 2011.
The snow removal budget is set by the city's charter as the average of the past five years.
"It's not unexpected that during the winter you would have a snowstorm," said Moody's Investors Service analyst Edith Behr. "Most of the mid-Atlantic states and certainly the Northeast are well positioned to handle these storms, they have equipment, they have supplies like sand salt plows, they have people on call, generally they have budgets to handle overtime."
The impact on shopping the day after Christmas is less clear.
"We really won't know whether one or two days of reduced commerce is made up later in the week or later in the month," Behr said. "The good news is it appears that people were doing a healthy amount of shopping around the holidays so in terms of sales tax, the commerce could be made up on either side of the storm so we don't know that that's anything to worry about."
Figuring the full economic impact of a storm is difficult to assess quickly, said Fitch Ratings analyst Douglas Offerman.
"The fact it happened right in the period right after the Christmas holiday could impact sales tax revenues in a key shopping season, Offerman said. "On the one hand, people can't get to work, stores can't open. On the other hand, people are buying snow shovels and snowblowers."
Some shopping activity may shift online or be delayed, he said.
"If the storm occurs on the weekend, it's a lot easier to deal with than if it occurs going into a real business week," Bloomberg said at a news conference Tuesday. "Fortunately, this is a quiet business week, so there is some mitigation to that problem."
Evan Rourke, portfolio manager at Eaton Vance, said that post-holiday volume has been low historically but that in the secondary market on Tuesday he saw an uptick in bids wanted as investors looked to settle deals before the end of the year and had essentially lost a business day Monday.
"In some ways it was a fortuitous time to have a storm because you're really coming into yearend, so the calendar is obviously really light," he said "If you had to have a storm that almost closed our market down for a day, you had a pretty good day to have that happen."
New York State's Metropolitan Transportation Authority, which experienced subway delays, cuts in commuter rail service, stuck buses, and a subway train stuck above ground during the storm, had no immediate estimate of the costs. History may provide some guide.
New York City received 51.4 inches of snow in the fiscal year that began July 1, 2009. Most of that was in February, when two storms hammered the city on Feb. 10 and 25 and the monthly snowfall totaled 36.9 inches.
The MTA in March noted that those snowstorms had a negative impact on its revenues in its monthly revenue report. Overall revenue in February from tolls and fares was down to $408.7 million, $16.5 million lower than budgeted. More than half of that, $8.5 million, was from bridge and tunnel fare revenues, which were 9.2% below budget. Most of the remaining drop was from bus and subway fares, which were off by $6.8 million.
The storm this week knocked out three major airports run by the Port Authority of New York and New Jersey that serve the metropolitan region — John F. Kennedy International, LaGuardia, and Newark Liberty International.
On Sunday, 1,444 flights were canceled, followed by roughly 3,000 flights — almost all of them — on Monday, according to Port Authority spokesman Steve Coleman. More than 500 were canceled on Tuesday.
Landing area fees are major revenue source of revenue for the Port Authority and are assessed on the weight of the plane on takeoff. Coleman did not have estimates on Tuesday for lost revenue to the Port Authority.
Elsewhere, Philadelphia was also digging out. The city spent close to $18 million on snow removal last year after a record snowfall, which budget director Rebecca Rhynhart said was "much higher" than previous years.
"It's difficult to budget for snow, given the wide swings for costs," she said. "It really depends on the type of snowfall." The city doesn't expect to have an estimate for the cost of the latest blizzard until later this week.
Dan Seymour contributed to this story.