NY Budget Blues
New York City and the state are looking at huge drops in tax revenues thanks to the coronavirus — and neither Mayor de Blasio nor Gov. Cuomo seems to have any good ideas about what to do beyond hoping for a federal bailout.
The state can make do by slashing its aid to local governments, but de Blasio’s fecklessness runs the risk that he’ll force the Financial Control Board to push the city into receivership.
The crisis “makes it a necessity to reinvent government services,” insists Andrew Rein, the president of the Citizens Budget Commission. “Resources will be squeezed,” he adds, “so getting more value out of every dollar spent will be critical.”
Consider the city’s situation: Despite the virus’ economic wreckage, the mayor projects a revenue dip of just $7.4 billion over two years. Yet with a slow and delayed reopening, the falloff is likely to be far greater — as much as $13 billion, by some accounts.
De Blasio’s budget also rests on rosy estimates of costs and fanciful hopes for federal aid. Last week, he fumed about President Trump “stabbing his hometown in the back” because he’s reluctant to bail out the city, and threatened “furloughs and layoffs” if Trump doesn’t pony up.
Please. Private-sector workers are seeing layoffs and pay cuts, yet de Blasio wants to hold the city workforce harmless. Indeed, after adjusting for surpluses, his financial plan actually boosts city-funded spending, Independent Budget Office numbers show.
And remember: If de Blasio and the City Council can’t produce a balanced budget in the next seven weeks, the Financial Control Board (set up by the state to resolve the city’s 1970s fiscal crisis) can trigger a “control period,” during which the board has final say over city spending.
So: Start with a rollback of de Blasio’s 10 percent hike in the city headcount — through attrition, if not furloughs and layoffs. Postpone now-clearly-unaffordable pay hikes he OK’d, too.
Rein notes that “labor relations” must change, too: Work rules and job titles need to provide more flexibility; retiree health benefits can be trimmed significantly.
Cut blatant waste, like Blas’ ferry subsidies, which run $9.34 a ride on average to serve mostly wealthy and middle-class passengers.
Cuomo is also desperate for Washington’s help, vowing as much as $10 billion in cuts without it: “Nearly every activity funded by state government in the aid-to-localities budget . . . will face steep cuts,” warns his budget director, Robert Mujica.
Like de Blasio, the gov’s resorting to scare tactics. Yes, both city and state legitimately need cash from the feds — but that won’t be enough: Each also needs to find major savings.
Cuomo can look to shrink (scrap?) his economic-development slush fund, rethink capital projects and streamline health care.
Indeed, that’s the good news for both the gov and the mayor: All the fat in their budgets leaves plenty to cut.