New York's Financial Crisis Growing
State tax receipts for New York are now $3.2 billion lower than 2019 according to the latest cash report released by the NYS Comptroller's office.
For August alone, the receipts are nearly $220 million less than the same month a year ago. The state did pull in roughly $310 million more than the latest projections from the state division of budget but, already facing a multi-billion dollar deficit, Comptroller Tom DiNapoli, D-NY, warned it’s not enough.
“Tax revenues continue to fall short of levels needed to fund education, health care and other vital services in this year’s budget,” DiNapoli said. “The revenue hole the pandemic created is getting deeper. Unless Washington acts to provide further fiscal relief for New York, painful budget decisions lie ahead.”
The numbers are relatively consistent across the board with personal income and sales tax receipts higher than projections but significantly lower than 2019. Spending is also down significantly, more than $2 billion less than projections and last year.
Those cuts have come primarily from local assistance grants according to the report. The state's general fund is nearly $1 billion above the DOB projections but the report noted that is partially due to short-term borrowing and delays in payments to local governments and other entities.
Hear from NYS Comptroller Tom DiNapoli on his interview on "Represent NYC".
Mayor de Blasio Announces Furloughs For Mayor’s Office Employees
Mayor Bill de Blasio announced plans yesterday to furlough 500 members of his staff, including himself, for five days in an effort to combat the city's budget issues.
“Dedicated public servants have worked tirelessly for our city and their fellow New Yorkers throughout this crisis,” said Mayor Bill de Blasio. “This is a painful step, but it shows just how committed we are to responsible budgeting and leading the City through these challenging times. Today’s announcement makes it clear we need Albany to step up, too. We need our partners in the state government to give New York City long term borrowing authority.”
This action, in addition to savings from the adopted budget, will represent a 12% cut to the FY21 Mayor’s Office budget. Saving roughly $1 million, a small dent in the $9 billion revenue shortfall the city is facing over two years due to lost taxes from the economic slowdown. It's been reported as a symbolic measure that could point to much more severe moves to come and signals to state leaders the urgency of de Blasio's request for borrowing authority to avoid furloughs and layoffs.
The mayor insists up to 22,000 city employees will be laid off if the city doesn't receive federal stimulus money or borrowing power from Albany good for at least $1 billion this fiscal year (he's seeking $5 billion to cover this year's and next year's gaps). De Blasio said the furloughs were a way of showing he was serious about making cuts and that other furloughs would be considered to avoid layoffs.
The City is facing an enormous budget challenge, a $9 billion toll on City revenue, and has already cut $7 billion from the budget between February and the Fiscal Year 2021 Adopted Budget announced in June. The City continues to work with labor groups to find savings and prevent layoffs.
The Administration has made historic moves to make the City fiscally responsible and prepared for adversity, including:
- Increased reserve levels every year and increased general reserve to record levels
- Created first ever Capital Stabilization Reserve
- Achieved billions of dollars in savings every year, even when revenue was strong
- At the height of the pandemic, achieved the largest savings plan of this Administration ($5.8 billion in FY20 and FY21 and $1.7 billion recurring)
- Saw our bond rating increased last year due to strong fiscal management
- Created New York City’s first-ever Rainy Day Fund.
The furlough requires the employees to take five unpaid days off between October 1 and March. De Blasio said that with its execution, his office's budget would be down 12 percent in sum from last fiscal year. The mayor said he would be working during his unpaid days but others wouldn't be required to.
"A lot of the people in this building have worked every single day since the pandemic began," de Blasio said Wednesday. "I don't want to take money away from them and their families, but it's at the point where we have to show that we're going to do anything and everything to get through this."
