New York City expects to see a budget deficit in excess of $9 billion over the next two years because of the coronavirus pandemic, but Mayor de Blasio’s calls for help were receiving little support from state lawmakers and Gov. Andrew Cuomo. In June, de Blasio suggested that the city may have to furlough or lay off 7 percent of city workers.
“It’s a massive, painful number,” de Blasio said. “It resembles the kind of things we had to do decades ago. But the job here is to try and avert if we can.”
And now it seems like they can. De Blasio has also lowered his borrowing request to $5 billion, dropping his previous appeal by $2 billion, and several agencies, such as the Municipal Labor Committee and the New York Conference of Mayors, seem to have given their support to the cause.
But some are not so sure of the de Blasio administration’s ability to properly get the financial support the city needs. Last month, Greg Floyd, president of a union within the Municipal Labor Committee, was worried that the labor unions are being forced into a situation that may still result in furloughs.
“The Municipal Labor Committee is only going along with it because he’s threatening layoffs,” he said. Floyd explained that the State Financial Control Board could still take over the city’s finances and alter the current labor union contracts. The Control Board was created 45 years ago and can legally acquire control of the city’s finances in extreme circumstances; increasing the long-term borrowing capacity could cause the board to take charge.
Floyd, and other union representatives, would like to see de Blasio seek other alternatives before jumping to increased borrowing.
One union source said, “The mayor asking the state for borrowing power as a first resort is like a family going to a loan shark first instead of cutting their Peloton subscription.”
The New York City Council’s Committee on Finance is set to vote on the long-term borrowing capabilities on Sept. 10.
