NYC Provides, Mayor Says, Eyeing Next Federal Bailout

A pedestrian walks past a storefront for rent on New York’s Madison Avenue last month. (AP Photo/Mary Altaffer)

MANHATTAN (CN) — New York City will hemorrhage $7.4 billion in sales and income tax revenue over this fiscal year and next, Mayor Bill de Blasio said Thursday, unveiling a grim new budget plan to deal with the modern plague.

“Anybody with a heart would recognize the federal government has to come to the rescue,” he said, also emphasizing that New York City is a “great economic leader and engine of this nation.”

“If we’re strong, our nation can be strong,” de Blasio added.

The city’s $89.3 billion budget is down $3.4 billion from the one announced last summer for fiscal year 2020. 

“Things that might have been a priority two months ago, three months ago, can’t be a priority right now,” the mayor said. “Things that we would love to focus on in peace time we don’t get to focus on in war time, and this, in effect, is war time.”

De Blasio said the four focus areas of the new budget are keeping New Yorkers healthy, safe, fed and housed.

Expressing gratitude to the city council for its rainy-day savings, de Blasio noted that the city had the highest fiscal reserves in the country before the pandemic hit. Going forward, however, “nothing else on earth can help us the way the federal government can,” said the mayor.

Begging for more help from the federal government’s next stimulus plan, de Blasio said there should be a $150 billion grant for states and localities, $100 billion more for hospitals and health care workers, and $250 billion for small businesses and paycheck protection. 

Michael Curran, an economics professor at Villanova University, said uncertainty by policymakers about the Covid-19 crisis has had a tremendous effect on the economy.

“The primary cause is Covid and the secondary cause is governmental mandates,” he said in an email Thursday. “The financial and economic crisis is a corollary, not the underlying disease.” 

He also emphasized the importance of keeping businesses afloat. 

“Without enterprise, there would be an extremely small government due to the loss of tax revenue or a centralized one with shortcomings, the historical record from the twentieth century has shown,” Curran wrote.

In the last package, the mayor noted, New York City’s government got $1.4 billion while the airline industry received $58 billion.

“If you lead, the Senate will follow,” De Blasio said in his press conference Thursday, addressing President Donald Trump directly. “If you are silent, they will not. It’s on you, Mr. President.” 

Michael Mulgrew, president of the United Federation of Teachers, the labor union that represents most New York City public school teachers, called on the mayor not to cut direct services to students and schools, instead looking to schools’ expensive central administration.

“We all know there are tough budget times ahead, and new sources of revenue have to be found,” Mulgrew said in a statement Thursday. “But according to its own filing with the state, the New York City school system spends more than $6 billion every year on central administration. To the extent that DOE cuts become necessary, that’s the first place the city should be looking. Now is not the time to cut direct services to students and school communities when they are going through so much.”

Describing the importance of mitigating the spread of Covid-19 within multigenerational households, de Blasio on Thursday also announced 11,000 free hotel rooms in the city for people who need to self-isolate.

The rooms will also be available to health care workers, the mayor said.

Speaking from Albany in a separate conference, Governor Andrew Cuomo announced Thursday that the state’s stay-at-home orders, which he calls “New York on Pause,” will continue until May 15. He didn’t want to project beyond that date.

“What happens after then? I don’t know,” he said. “We will see, depending on what the data shows.”

Reuters broke a story Wednesday that Cuomo had hired McKinsey Consulting to develop a “Trump-proof,” science-based regional economy reopening plan. 

Trump wants to open the economy back up as soon as possible, while Cuomo maintains he will wait for the data to show it is safe, echoing experts who insist widespread diagnostic and antibody testing is crucial to send people back to work, school and restaurants. Deloitte Consulting and three high-powered former Cuomo aides are also working on the plan, Reuters reported. 

Cuomo said New York state has a transmission rate for the virus of 0.9, meaning each infected person infects less than one other and the virus can be controlled. But if that number rises just to 1.2 — or each infected person infecting more than one other — hospitals will again be overwhelmed, leaving little “wiggle room” and pointing to the need for continued social distancing.

Cuomo said the state will release later this afternoon crucial data on nursing home deaths in the state related to Covid-19. He said nursing homes have been through a “hellacious” time, and it has been difficult to get the data.

He also called on employers in the state to start reimagining their workplaces to suit the new normal until the pandemic ends. Seating employees six feet apart or ensuring they can work from home if possible is crucial, he said, as well as providing for their safe transportation to and from work if they must go in.

Melissa DeRosa, secretary to the governor, spoke about the overwhelming wave of unemployment claims in the state, saying it has seen 1.2 million in just the last five weeks. In comparison, DeRosa said, there were just 300,000 such claims during the 2008 financial crisis.

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