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Virus Forces a ‘Wartime’ Budget on N.Y.C., With $2 Billion in Cuts Virus Forces a ‘Wartime’ Budget on N.Y.C., With $2 Billion in Cuts
(4 days later)
With the coronavirus pandemic ravaging New York’s economy, Mayor Bill de Blasio said on Thursday that the city will be forced to slash more than $2 billion in municipal services over the next year.With the coronavirus pandemic ravaging New York’s economy, Mayor Bill de Blasio said on Thursday that the city will be forced to slash more than $2 billion in municipal services over the next year.
All aspects of New York City life will be affected: Public pools will be closed; sanitation pickups will be reduced. Fewer police traffic agents will be deployed at intersections; overnight service on the Staten Island Ferry will be reduced.All aspects of New York City life will be affected: Public pools will be closed; sanitation pickups will be reduced. Fewer police traffic agents will be deployed at intersections; overnight service on the Staten Island Ferry will be reduced.
The cuts were part of a gloomy $89.3 billion executive budget that reflects the way that New York City has become the epicenter of the global coronavirus pandemic. The outbreak has killed more than 10,000 city residents, shuttered thousands of businesses, emptied the city’s once bustling hotels and darkened the lights on Broadway.The cuts were part of a gloomy $89.3 billion executive budget that reflects the way that New York City has become the epicenter of the global coronavirus pandemic. The outbreak has killed more than 10,000 city residents, shuttered thousands of businesses, emptied the city’s once bustling hotels and darkened the lights on Broadway.
It has also cost hundreds of thousands of New Yorkers their jobs and will deprive the city of $7.4 billion in tax revenue in fiscal years 2020 and 2021.It has also cost hundreds of thousands of New Yorkers their jobs and will deprive the city of $7.4 billion in tax revenue in fiscal years 2020 and 2021.
“Things we would love to focus on in peacetime, we don’t get to focus on in wartime,” Mr. de Blasio said at his daily briefing. “And this is in effect wartime.”“Things we would love to focus on in peacetime, we don’t get to focus on in wartime,” Mr. de Blasio said at his daily briefing. “And this is in effect wartime.”
The budget, which still requires City Council approval, is $3.5 billion less than the one the city approved last year and $6 billion less than the preliminary plan the mayor introduced in January. The Council could restore some of the services the mayor is proposing be cut.The budget, which still requires City Council approval, is $3.5 billion less than the one the city approved last year and $6 billion less than the preliminary plan the mayor introduced in January. The Council could restore some of the services the mayor is proposing be cut.
Back then, the mayor warned that the city’s financial situation was somewhat precarious because it was not clear how the state’s projected $6 billion deficit might affect the city. But a far greater threat has now been realized, forcing City Hall to make broad cuts across numerous agencies.Back then, the mayor warned that the city’s financial situation was somewhat precarious because it was not clear how the state’s projected $6 billion deficit might affect the city. But a far greater threat has now been realized, forcing City Hall to make broad cuts across numerous agencies.
“Things that might have been a priority two months ago, three months ago, can’t be a priority right now,” Mr. de Blasio said.“Things that might have been a priority two months ago, three months ago, can’t be a priority right now,” Mr. de Blasio said.
The city will close all outdoor pools for the season, cut its Vision Zero traffic safety program even though pedestrian and cyclist fatalities were on the rise before the outbreak, and reduce through attrition 100 traffic agent positions dedicated to intersection control.The city will close all outdoor pools for the season, cut its Vision Zero traffic safety program even though pedestrian and cyclist fatalities were on the rise before the outbreak, and reduce through attrition 100 traffic agent positions dedicated to intersection control.
The summer youth employment program and the collection of organic waste will be suspended. Tree pruning and tree stump removal will be curtailed. There will be a hiring freeze.The summer youth employment program and the collection of organic waste will be suspended. Tree pruning and tree stump removal will be curtailed. There will be a hiring freeze.
Before the outbreak, Mr. de Blasio had overseen a period of booming growth in tax revenue and economic prosperity that had allowed him to spend more than past mayors. But the city now projects a loss of 500,000 jobs over the first three quarters of 2020, the end of a decade-long expansion of jobs.Before the outbreak, Mr. de Blasio had overseen a period of booming growth in tax revenue and economic prosperity that had allowed him to spend more than past mayors. But the city now projects a loss of 500,000 jobs over the first three quarters of 2020, the end of a decade-long expansion of jobs.
Most of those losses are expected in the second quarter, with retail, leisure and the hospitality industry making up half the job losses.Most of those losses are expected in the second quarter, with retail, leisure and the hospitality industry making up half the job losses.
“We don’t know when this crisis ends,” the mayor said. “We do know it will end, that much we can say, thank God. But we don’t know when, we don’t know how, and we know that the impact that’s been made on people continues to grow, and we know that the loss of revenue could be even greater.”“We don’t know when this crisis ends,” the mayor said. “We do know it will end, that much we can say, thank God. But we don’t know when, we don’t know how, and we know that the impact that’s been made on people continues to grow, and we know that the loss of revenue could be even greater.”
The mayor, a Democrat in his second term, said the budget focuses on four basic measures of keeping city residents safe, healthy, housed and fed.The mayor, a Democrat in his second term, said the budget focuses on four basic measures of keeping city residents safe, healthy, housed and fed.
“If we can’t provide the basics for our people, then you can kiss your recovery goodbye,” Mr. de Blasio said.“If we can’t provide the basics for our people, then you can kiss your recovery goodbye,” Mr. de Blasio said.
City officials had to dip into savings to balance the budget, drawing $900 million from the general reserve, $250 million from the capital stabilization fund and $2.6 billion from the retiree health benefits fund, a move that does not affect retiree benefits in the short term.City officials had to dip into savings to balance the budget, drawing $900 million from the general reserve, $250 million from the capital stabilization fund and $2.6 billion from the retiree health benefits fund, a move that does not affect retiree benefits in the short term.
But the costs of fighting the epidemic are growing. The city has spent $700 million so far to fight the coronavirus and expects that number to rise to $3.5 billion by the end of this calendar year. There is also lingering uncertainty over how much state budget cuts will hurt the city. Mr. de Blasio projected $800 million in funding losses from the state.But the costs of fighting the epidemic are growing. The city has spent $700 million so far to fight the coronavirus and expects that number to rise to $3.5 billion by the end of this calendar year. There is also lingering uncertainty over how much state budget cuts will hurt the city. Mr. de Blasio projected $800 million in funding losses from the state.
The mayor repeated his call for the federal government to provide more stimulus funds to cities and states. The mayor criticized the bailout of the airline industry and said New York had received just $1.4 billion in direct aid.The mayor repeated his call for the federal government to provide more stimulus funds to cities and states. The mayor criticized the bailout of the airline industry and said New York had received just $1.4 billion in direct aid.
“How about bailing out the nation’s largest city? How about bailing out the epicenter of this crisis where people have been suffering?” Mr. de Blasio asked.“How about bailing out the nation’s largest city? How about bailing out the epicenter of this crisis where people have been suffering?” Mr. de Blasio asked.
Asked how much aid he expected from the federal government, the mayor said, “We need the federal government to make up all lost revenue. Period.”Asked how much aid he expected from the federal government, the mayor said, “We need the federal government to make up all lost revenue. Period.”
“Will the president speak up?” Mr. de Blasio asked. “If President Trump raises his voice, the Republican Senate will follow.”“Will the president speak up?” Mr. de Blasio asked. “If President Trump raises his voice, the Republican Senate will follow.”
Updated July 16, 2020 Updated July 22, 2020
Gov. Andrew M. Cuomo, speaking from a news conference in Albany, said he’s had the same conversation with other local governments about their looming budget deficits and has given the same answer: “We cannot do it.”Gov. Andrew M. Cuomo, speaking from a news conference in Albany, said he’s had the same conversation with other local governments about their looming budget deficits and has given the same answer: “We cannot do it.”
“I have a 10 to 15 billion-dollar hole, so I’m not in any position to help any of it. This is why I’ve said this is where the federal government has to step in,” Mr. Cuomo said.“I have a 10 to 15 billion-dollar hole, so I’m not in any position to help any of it. This is why I’ve said this is where the federal government has to step in,” Mr. Cuomo said.
As pessimistic as the mayor’s budget plan is, the Independent Budget Office suggests that the coronavirus pandemic may have an even more devastating effect on New York City’s economy.As pessimistic as the mayor’s budget plan is, the Independent Budget Office suggests that the coronavirus pandemic may have an even more devastating effect on New York City’s economy.
The Independent Budget Office projects that the city could lose 475,000 jobs starting in the second quarter of this year through the first quarter of 2021. That would result in a loss of almost $10 billion in tax revenue for fiscal years 2020 and 2021, 33 percent more than the mayor’s budget projection.The Independent Budget Office projects that the city could lose 475,000 jobs starting in the second quarter of this year through the first quarter of 2021. That would result in a loss of almost $10 billion in tax revenue for fiscal years 2020 and 2021, 33 percent more than the mayor’s budget projection.
Mr. de Blasio acknowledged being worried that the city’s projected revenue loss could grow by billions of dollars.Mr. de Blasio acknowledged being worried that the city’s projected revenue loss could grow by billions of dollars.
New York City may be uniquely affected by the virus because the city is heavily dependent on the very industries — tourism, retail and entertainment — that have been shut down by the stay-at-home order to halt the spread of the virus.New York City may be uniquely affected by the virus because the city is heavily dependent on the very industries — tourism, retail and entertainment — that have been shut down by the stay-at-home order to halt the spread of the virus.
Corey Johnson, the speaker of the City Council, said in a statement with Council leaders that the Council wants to protect the most vulnerable New Yorkers by continuing “critical” social services.Corey Johnson, the speaker of the City Council, said in a statement with Council leaders that the Council wants to protect the most vulnerable New Yorkers by continuing “critical” social services.
“These are unprecedented times, and we begin budget negotiations facing challenges we have never faced before,” he said in the statement.“These are unprecedented times, and we begin budget negotiations facing challenges we have never faced before,” he said in the statement.
Andrew Rein, president of the Citizens Budget Commission, said that Mr. de Blasio needs to make deeper cuts to the city’s work force, which has grown to a record number of employees during the mayor’s tenure, or face large budget deficits in upcoming fiscal years.Andrew Rein, president of the Citizens Budget Commission, said that Mr. de Blasio needs to make deeper cuts to the city’s work force, which has grown to a record number of employees during the mayor’s tenure, or face large budget deficits in upcoming fiscal years.
“The budget provides stark evidence that we are not only in a health and economic crisis but that the city is facing a fiscal crisis,” Mr. Rein said.“The budget provides stark evidence that we are not only in a health and economic crisis but that the city is facing a fiscal crisis,” Mr. Rein said.
Mayor de Blasio said that he considered employee layoffs a “last resort” that he would only contemplate if the city does not receive enough federal aid.Mayor de Blasio said that he considered employee layoffs a “last resort” that he would only contemplate if the city does not receive enough federal aid.