The city is going through really tough times, last week’s reports make it clear, and the pain may be worse thanks to continued denial by Mayor Bill de Blasio and the City Council.
In a sobering 67-page document, the Association for the City of New York warns that restarting the local economy will be “much more difficult” than shutting it down, with a grim image of a much-changed city:
• For the past month, the region had “experienced more infection, death and economic destruction than anywhere in the world.”
• Up to a third, or nearly 80,000, of the 230,000 small businesses in the five boroughs “may never reopen.”
• An unemployment rate of 18.3 percent has left up to 1 million households “in trouble”.
• Only 40 percent of Manhattan office workers will return by the end of the year; 25 percent may never return, leading employers to cut space and take jobs out of town entirely.
• Gotham’s economy is on track to shrink 7 percent in two years, causing huge losses of state and municipal tax revenue. “Significant federal aid is essential,” but it will not be enough to fill the gaps.
Meanwhile, the MTA, so vital to the health of the city, is in an even more dire situation: “There have been financial crises before, but never one in which deficits were measured in billions in addition to billions in addition billions of dollars, “sighs agency chief Pat Foye.
With almost no one riding the subway during closing, fare revenue virtually disappeared and new cleanup measures added costs. Fee revenue has increased, but has stabilized at around 20 percent of pre-pandemic rates.
State aid cuts and a delay in congestion pricing will cost the MTA even more, leaving a $ 16 billion deficit until 2024. Even if the feds comply with their request for another $ 3.9 billion, that would last only until the end of the year.
Faced with such a nightmare, officials are considering drastic steps: service setbacks, job cuts, deferred improvements and toll increases. All of which can further increase the region’s economic return.
However, de Blasio and the council refuse to face the city’s devastating fisc-like coup. As a report by the Citizens Budget Commission points out, last month’s budget plan closed more than half of a multi-million dollar deficit by taking advantage of federal aid and reserves, and only 44 percent through lower spending. And much of the savings won’t be replicated, splashing $ 10 billion in red ink over the next three years. The CBC criticizes De Blasio for that and for his “unrealistic projections.”
As if to prove the point, the Independent Budget Office calculated last week that NYPD’s overtime costs would only exceed $ 400 million above budget, and other budget assumptions are just as overactive.
De Blasio and the council are doing great damage to the city by kicking the can along the way and avoiding difficult decisions now. They may prefer to delay, but New Yorkers will suffer longer.
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