NYC foresees $7.4B tax loss due to virus, seeks federal help

Apr 16, 2020

New York City expects to take a $7.4 billion budget hit over the next 15 months because of the coronavirus

NEW YORK (AP) — New York City expects to take a $7.4 billion budget hit over the next 15 months because of the coronavirus, Mayor Bill de Blasio said Thursday as he detailed planned cuts and appealed to President Donald Trump and Congress for an infusion of cash for cities and states.

“If you lead, the Senate will follow. If you are silent, they will not. It’s on you, Mr. President,” the Democrat said at a news briefing. He said he spoke Wednesday to the Republican president and told him “his hometown needs him.”

The city so far has spent over $700 million to handle the virus outbreak and expects to spend a total of $3.5 billion by the end of December, according to a news release from the mayor's office.

The new spending has come as tax revenues are shrinking. The mayor’s new $89.3 budget proposal, released Thursday, trims projected tax revenue by $2.2 billion in the current budget year, and it’s $5.2 billion lower than his earlier plan for the fiscal year that begins in July.

The city has drawn on reserves, and it’s also saving on some programs because of virus-related shutdowns. But the mayor’s plan also calls for making a wide variety of trims: everything from delaying an expansion of its free prekindergarten program for 3-year-olds to reducing tree pruning, and from suspending a summer-job program for young people to closing city pools this summer in light of the virus.

Still, there are uncertainties about whether it will be enough. The city Independent Budget Office on Wednesday projected a $9.7 billion revenue shortfall in this budget year and next. De Blasio said he respects the independent agency but stands by City Hall’s projections.

He said layoffs or furloughs would be a last resort, but “honestly, that decision rests in Washington.”

“Washington has to step in so we can provide basic services," he said. “We must have that stimulus money, or else we’re going to have to make horrible choices.”