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New York City is ‘$9 billion in the hole’ because of coronavirus says Mayor de Blasio

Photo via Flickr/Mayor's de Blasio's office

New York City now faces a $9 billion budget deficit in the city’s $ 89.3 billion financial plan due to the novel coronavirus pandemic Mayor Bill de Blasio announced on Wednesday. 

“We have to come to grips with the fact that on top of the healthcare crisis, on top of the economic crisis, we are now in a crisis here in the city,” said de Blasio. “Our fiscal situation has gotten worse… but it’s not shocking to me.”

“There is literally no way that we can solve this problem without federal help or without making very, very painful choices that will affect the quality of life in this city,” said de Blasio.

The mayor projected $ 7.4 billion in lost revenue because of the pandemic that the economic toll would last beyond the next fiscal year. In April, de Blasio’s preliminary 2021 city budget was $6 million less than what he proposed in January and included $ 2 billion in spending cuts to education, parks, healthcare, social services, law enforcement, transportation and housing. 

With no help from the senate or the federal government insight and with the deadline to pass a 2021 fiscal year budget quickly approaching, the city called on Albany for a “safety net” and to provide borrowing authority. On Monday, state Senator Liz Krueger, chair of the state senate’s finance committee, introduced a bill that would allow the city to borrow up to $7 billion by authorizing the Transitional Finance Authority to issue debt to make up for potential losses in 2021. 

“It’s not something we want to use or intend to use in the first instance, but it’s something we need as a last resort,” said de Blasio, citing former mayor Micheal Bloomberg’s borrowing request to Albany in the aftermath of 9/11 as precedent. De Blasio also used the New York state legislature’s approval of debt up to $ 11 billion another example. 

“There was no debate, there was no fanfare, it was obviously the right thing to do,” said de Blasio. “This city has been smart with its stewardship of our resources, smart in the way we serve our people and grow our economy and we need to keep doing that.”

On Tuesday, when the mayor first mentioned plans to try to increase the city’s borrowing power, Governor Andrew Cuomo opposed the idea calling borrowing for operating expenses “fiscally questionable.” 

 

 

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