NYC Isn’t Ready for Economic Disaster

THE City Council and I have a simple, reasonable request this budget season: We want to put away more money for a rainy day, because the downpour will inevitably come.

Even in good times, we have to plan for the worst.

So when Mayor de Blasio released his preliminary budget, we responded with a proposal that the city set aside $500 million in the next fiscal year specifically to cushion the blow from the next economic downturn. Here’s why this is important: We don’t know when the hard times will come, but we do know the city has been flush with cash for the past nine years, and it won’t last forever.

Since 2009, New York City has enjoyed its largest economic expansion since World War II. Employment has soared. We added 702,000 jobs from 2009 to 2017 — that’s an 18.9 percent spike, according to a recent report from the state comptroller

The notion that this will continue indefinitely is simply unrealistic.

Last year, the mayor took a step in the right direction. After the council requested a $317 million increase to reserves, the city added $300 million.

This time, the city should allocate the full amount we’re requesting.

Our rationale is simple. So far this year, we’ve collected over $2 billion more in personal income taxes than we did last year — that’s 22 percent more than the $9.5 billion we collected at this time in 2017.

This year, we’re at $11.6 billion. That’s unprecedented.

Even with last year’s weaker collection, the de Blasio administration still managed to set aside $300 million in reserves. That was the right thing to do. We need to do it again, but we need to do more.

Like the mayor, I’m proud to call myself a progressive. But I think it’s worth pointing out that being progressive also means we should be careful with, and think longterm about, taxpayers’ money.

The $500 million.reserve the City Council is requesting is sound public finance. If the city doesn’t have enough stored away in a rainy-day fund, and there’s a downturn, we’ll be forced to make cuts to public services. And as history has shown, the first cuts will likely be felt by not-forprofit social-services agencies, which help New Yorkers in need.

These are New Yorkers who depend on after-school programs and senior centers. We need to keep them in mind when we’re hammering out the budget.

A risk analysis by the council’s Finance Division found that roughly three times out of 10, the city’s reserves wouldn’t be enough to keep the budget balanced for four years without tax hikes or budget cuts.

This isn’t surprising given that the mayor’s executive plan itself shows considerable budget deficits from 2020 through 2022 — all during years his ad- ministration has projected a growing economy.

But if the economy slows down, if a recession were to hit, these deficits would look even worse, and our reserves would quickly dry up.

Recession isn’t the only thing we need to worry about, though. An emergency like a superstorm or a terrorist attack would cost us dearly. And if there’s little cushion, the city will have to make cuts.

If that happens — God forbid — our social safety net will be immediately vulnerable if we don’t take proper steps now to protect it. I don’t want to see that happen. The council doesn’t want to see that happen. And I don’t think the mayor wants to see that happen, either.

Roughly three times out of 10, the city’ s reserves wouldn’ t be enough to keep the budget balanced for ’ four years without tax hikes or budget cuts.