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Mayor de Blasio proposed an $89.3 billion executive budget for New York City on Thursday amid plummeting tax revenue and economic fallout from coronavirus, forcing billions in cuts and new spending to fight the pandemic.
The executive budget for the fiscal year 2021 is $6 billion less than the unprecedented $95.3 billion preliminary spending plan de Blasio proposed in January, before coronavirus socked the city with some $7.4 billion in tax revenue shortfalls over the next two years.
Now the epicenter of the worldwide outbreak, the city has spent more than $846 million to respond to coronavirus already and expects to spend $3.5 billion by the end of 2020.
“Things that might’ve been a priority…two months ago, three months ago, can’t be a priority right now. Things that we would love to focus on in peacetime, we don’t get to focus on in wartime,” de Blasio said during a briefing. “The executive budget I’m presenting today was built for this moment in history and a moment unlike any other.”
Hizzoner said the federal government should make up all $7.4 billion in lost revenue to ensure both the city and country can recover from the pandemic. He said the city shouldn’t have to reimburse 25% of FEMA funding spent during the crisis.
“If we can’t provide the basics for our people, then you can kiss your recovery goodbye. It’s as blunt as that,” de Blasio said, adding later, “If they had $58 billion to the airline industry, I assure you, they can find $7.5 billion for the nation’s largest city.”
Already, the city proposed $2.7 billion in budget cuts this fiscal year and next, and has also dipped into its rainy-day reserves for about $4 billion. Total reserves for the fiscal year 2021 now stand at $2.18 billion.
“The cuts that were made were very substantial and very necessary,” de Blasio said.
Outdoor public pools will be closed this summer – and beaches maybe next – saving at least $12 million.
The city will also slash millions in education funding and summer programs, delay hiring and training for some FDNY and NYPD positions, pare down traffic enforcement agents, reduce Staten Island Ferry service, put off implementation of a “green wave” plan meant to boost bicyclist safety, cut tree pruning and stump removal, scale back sanitation and cleaning efforts, suspend organic recycling, postpone a placard abuse team and more.
Multiple agencies will reduce vacant positions and freeze hiring, though de Blasio said layoffs and furloughs are a “last resort.”
And de Blasio said the city hasn’t yet requested authority to borrow for increased operating expenses but could do so in the future.
The executive budget must be adopted before June 30, when the city’s fiscal year 2020 ends, with the approval of the Council.
Typically the Council holds a series of hearings on both the preliminary budget, proposed in January, and the spring’s executive budget.
In mid-March, the Council and the mayor agreed to suspend legal requirements for city budget hearings because of safety the pandemic, but the lawmaking body is preparing to resume this oversight remotely.
“These are unprecedented times, and we begin budget negotiations facing challenges we have never faced before,” Council Speaker Corey Johnson and Councilmembers Daniel Dromm and Vanessa Gibson said in a joint statement.”We will use our upcoming budget process, which will be done remotely for the first time in Council history, to determine the best ways to deal with the extreme economic challenges we are facing as a City.”
The Independent Budget Office estimated this week a combined shortfall of $9.7 billion in revenue from the city’s major tax sources in fiscal years 2020 and 2021. This is based on the assumption the city will lose about 475,000 jobs in 12 months because of the coronavirus pandemic.
The mayor’s office estimates a smaller dip in revenue – by 3.5% this year and 8.3% next year – but de Blasio said those numbers can creep up. The losses are from declines in sales and hotel tax, personal income taxes and business taxes, all from the coronavirus pandemic.
On top of the revenue dip, the city was forced to “backfill” $800 million in funding cut from the state budget, including $360 million in an education aid shortfall and $123 million in financial assistance for families in need. The city had to put up another $63 million toward the MTA’s paratransit service.
Comptroller Scott Stringer said de Blasio could have better protected against the budgetary crisis.
“A more robust savings program in prior years would have helped to build up a bigger cushion to protect against cuts that will be devastating in particular to New York City’s youth,” Stringer said.
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