Bonuses on Wall Street dropped by 26% last year, falling to $176,700 on average, according to a report released Thursday by New York state Comptroller Tom DiNapoli. 

Spiking interest rates, as well as concerns over a potential recession, has contribured to the lower bonsues, which in 2021 averaged more than $240,000. 

The strength of New York's financial industry is key to the overall economic health of New York state, and is one of the main drivers of revenue for the state budget. Tax revenue from the securities industry acccounted for $22.9 billion, or nearly a quarter of the state's overall tax collections. 

New York lawmakers and Gov. Kathy Hochul this month are negotiating a state budget that is due on Saturday. 

“Wall Street’s cash bonuses were expected to fall as several factors weighed on the securities’ industry profitability in 2022,” DiNapoli said. “A 26% decline brings the average bonus closer to what financial employees received prior to the pandemic. While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street. Employment in leisure and hospitality, retail, restaurants and construction must continue to improve for the city and state to fully recover.”

All told, a $33.7 billion bonus pool in 2022 was 21% lower from the $42.7 billion paid out a year prior. That represents the largest drop in bonuses since the onset of the Great Recession 15 years ago.