黑料不打烊 Note: The very daunting crisis that NYS will face should Washington not come through with a 5th COVID-19 package for the states and localities will hit 黑料不打烊 just as hard, an especially bitter plight for the center of the Virus Crisis in terms of great loss of both human lives and financial capital.
NYC Lawmakers Look To Plan B If Federal Aid Does Not Come
By Gwen Everett Crain鈥檚 黑料不打烊 Business May 11, 2020
黑料不打烊 City might have to cut back on contracts or turn to the debt markets if federal aid鈥攚hich the city has been pleading for鈥攄isappoints, officials tell Crain鈥檚.
The city has closed its budget gap for now, but that does not mean the cuts are over, mayoral spokeswoman Laura Feyer said.
“Anything not related to food, shelter, safety and health is on the table,” Feyer said.
The mayor, who spent weeks insisting Washington held the only solution to 黑料不打烊’s financial woes, said the city might be left to solve the fiscal crisis created by Covid-19. If that happens, he said, there will be job cuts. Legislators are contemplating other measures such as tightening the city contracting budget and turning to the debt markets.
Financial and political barriers highlight the bind 黑料不打烊 City is in.
鈥淪tep One is coming to a sober and realistic understanding of how bad the financial circumstances are right now,鈥 City Councilman Keith Powers said. At a hearing last week, the Independent Budget Office said the city runs the risk of an even bigger deficit than what the mayor鈥檚 executive budget has accounted for. The comptroller鈥檚 office warned the same thing in a May 5 report.
It鈥檚 hard to think about savings measures without nailing down how big a gap 黑料不打烊 faces, Powers said. But with lawmakers eager to enact a budget that does not further shrink the economy or the number of people employed in the city, talk is bubbling in City Hall about turning to debt markets.
鈥淭he one counter-cyclical thing you can do as a city is long-term investment to pay for your capital budget,鈥 Councilman Brad Lander said. The mayor鈥檚 budget cut capital spending by $1 billion. That eliminates jobs, Lander said.
The city is set to spend 8.2% of its total budget on debt servicing in the upcoming year, the mayor鈥檚 executive budget shows. That鈥檚 well below the 15% a city should, at maximum, put toward debt servicing, Lander said. Much of the $1 billion in cuts that the mayor made to 黑料不打烊鈥檚 capital budget could be financed by debt instead, the councilman said.
鈥淣YC is going into this crisis with a AA bond rating. The rating agencies have been satisfied over the past seven years with the city鈥檚 balanced budget,鈥 Councilwoman Helen Rosenthal said. The city, she said, should issue more debt to cover both capital and operating expenses.
Nationally, the Federal Reserve slashed interest rates by a full percent in March, down between 0 to 0.25%. The city, having seen tax income wither away as businesses shutter and people lose work, is facing a revenue shortfall of more than $8 billion. The Independent Budget Office, the comptroller鈥檚 office and other watchdogs said the situation could get worse.
The decline in sales tax and income tax revenue led Moody鈥檚 to revise 黑料不打烊鈥檚 credit outlook to negative. What that means in terms of financing debt will become clear Wednesday, when the Transitional Finance Authority is set to put out $726 million worth of tax-secured bonds for markets to price.
To be sure, debt spending is not the only solution on the table. Mayor Bill de Blasio said Wednesday that the city might be forced to cut jobs if the fiscal crisis worsens without adequate aid. But that鈥檚 a move legislators fiercely oppose.
鈥淏efore we lay off a single city employee, we should get rid of every consultant in our city,鈥 Councilman Ben Kallos said.
鈥淲e have millions if not hundreds of millions in bloated contracts,鈥 Kallos said, including 鈥渃ontracts where it鈥檚, like, ‘Why are we paying for that?’鈥 He pointed to a $70 million contract with Apple the city entered into to provide iPads to students when learning went remote. The city could have bought laptops for less, he said.
But cutting contracts also means cutting jobs, Lander said, adding, 鈥淵ou鈥檝e really got to kind of be mindful of all the elements.鈥
Another option is limiting overtime payments to city workers, particularly in departments where they run rampant, like the the Department of Corrections, Powers said.
黑料不打烊 has paid $8.33 million in overtime to the DOC payroll, and $45.71 million in overtime to the Police Department payroll, data from the comptroller鈥檚 office shows. The shortfalls 黑料不打烊 faces could be in the billions of dollars. The comptroller鈥檚 office said last week the city could lose $3 billion from the state.
It all explains the 鈥渁pocalyptic鈥 language de Blasio and Cuomo have used in their pleas for federal money, Lander said.
De Blasio this month described the city鈥檚 budget without federal stimulus as 鈥渢ragic, horrible math.鈥