MANHATTAN (CN) — Predicting a $9 billion revenue drop after months of battle with Covid-19, and the attendant economic slowdowns, New York City Mayor Bill de Blasio pleaded Wednesday for federal assistance.
The figure is $1.6 billion more than what the mayor had projected last month for lost revenue between the current fiscal year and the next, which begins July 1. Wednesday’s revision reflects more dire circumstances than originally predicted.
“I’m very sorry that I’m giving you this news, but it’s not shocking to me,” the mayor said at his daily Covid-19 press conference.
“There is literally no way we can solve this problem without federal help, or without having to make very, very painful choices that will affect the quality of life in the city.”
The city has to pass a budget by the end of June. De Blasio said he’s asked the state for borrowing authority of up to $7 billion for up to 30 years as “a last resort.”
While he took home a salary of $254,392 in 2018, according to Politico, de Blasio has said he has no plans for pay cuts for city employees, including himself. New York City’s unemployment rate hit 14.2% in April, according to state data.
But NYU professor Thad Calabrese, a former tax policy wonk in the New York City Office of Management and Budget, said local cuts make sense at a time like this.
Because of the way New York has structured its income tax, he said, it’s reliant on high earners who pay more into it than lower earners. Calabrese said their income can vary “significantly,” however, because it’s made up of wages as well as capital gains, dividends and interest. As a result, he explained, income tax is a less stable source of income than, say, property tax.
“You have a base that relies on high-end people with a progressive tax system,” Calabrese said. “And those systems are very prone to fluctuations in revenues, as a result of it.”
NY1 reporter Zack Fink tweeted Wednesday afternoon that Albany lawmakers were hesitant to write de Blasio a “blank check” before he even cut salaries at City Hall.
While Calabrese said de Blasio’s refusal to fire city workers was “a great thought,” he cited a suggestion by the Manhattan Institute’s Nicole Gelinas to instead furlough some city workers, such as crossing guards, and allow them to collect unemployment.
“Save the city some money so we don’t have to cut as much money later on, and you can bring them back,” Calabrese said. “You’ve basically offloaded part of the problem to the federal government, which, you know, has a printing press, and they can do that.”
De Blasio has been a lucky mayor, Calabrese said, meaning during his tenure he has been able to spend with relatively few restrictions.
“He added lots of headcount,” Calabrese said. “Some of that is for universal pre-K and things like that … but he’s also added significant amounts of people in his office who have quite high salaries. All have fairly significant fringe benefits.”
And de Blasio’s own unsuccessful 2020 presidential run cost New York taxpayers at least $100,000 in travel expenses for NYPD bodyguards, according to The City.
A guest column in the New York Daily News by Alex Vitale of the Policing and Social Justice Project last week called for cuts to the NYPD’s budget of $1 billion over four years.
De Blasio and Governor Andrew Cuomo have both continually put the onus on the feds.
“To fight back a disease that really is part of an international pandemic, of course, it should be the responsibility of the federal government first and foremost to address this,” de Blasio said Wednesday. “And yet here we are waiting once again for action. We’re not hearing from the president; we’re not hearing from the Senate majority leader.”
He said the Senate had not even scheduled a vote yet on the latest stimulus bill passed by the House.
Cuomo, speaking Wednesday in Washington after a meeting with President Trump about infrastructure and the economy, also called on the Senate to pass a relief bill that would help New Yorkers and others in hard-hit states. In New York state, 364,965 people have tested positive for Covid-19, and 23,643 have died of it, according to state numbers. The real numbers are likely higher, since the state tracks only confirmed cases.
As he has in recent weeks, Cuomo highlighted New York’s contributions to the national economy, pointing out Wednesday that some of the states hit hardest by Covid-19 — including New York, California, Illinois and Pennsylvania — make up a third of the nation’s GDP. If they struggle, he said, the nation will struggle.
“States are doing reopening, states are responsible for testing, states are responsible for tracing, states are responsible for the health care system, states are responsible for the enforcement of all the procedures around reopening,” Cuomo said.
“But at the same time, the federal government has a role to play, and the federal government has to do its part. As we work our way through this crisis. And there cannot be a national recovery if the state and local governments are not funded.”
The term-limited de Blasio will leave office in 2021, so his successors will deal with much of the city’s financial fallout from Covid-19. The virus had sickened 197,351 and killed 21,362 in the city, counting both confirmed and probable Covid-19 deaths, as of Wednesday afternoon.
“New York has been very lucky in that we have very rich people who are willing to live here. And we’ve had a booming stock market,” Calabrese said of the city’s finances.
“Otherwise we’ve been very lucky, for a very long time,” he added. “We don’t have a ton of reserves; we have some reserves.”
Also Wednesday, de Blasio touted the city’s program to isolate Covid-19-positive individuals for free in hotel rooms if they cannot safely isolate at home. New Yorkers who believe they need a hotel room can call a hotline at 844-692-4692.