By Hadassa Kalatizadeh
On Friday June 26th, Mayor Bill de Blasio said he is hoping for a $5 billion state loan to bail the city out. The money would be necessary to combat the city’s $9 billion deficit over the next two years, which was caused by the ensuing pandemic and shutdown– or else the city may need to lay off thousands of NYC employees. The Mayor made the depressing economic announcement at his City Hall briefing, saying that the worse-case scenario would be 22,000 city layoffs, which would begin October 1st. “I hate to have to say this,” the mayor declared. “The reality we’re facing right now is a massive economic crisis … We’ve lost $9 billion in revenue.
As reported by the NY Daily News, in a letter to state legislators, de Blasio proposed borrowing a maximum of $5 billion, spread across two years: $3 billion for fiscal 2021 and $2 billion more for fiscal 2022 to combat the devastating effects of the pandemic. He said that if the funding is not approved by the end of the month, then the layoffs would be the last resort, in the absence of federal funds.
“The president’s been missing in action on the stimulus,” de Blasio said shifting the blame to the White House. “I have spoken to him about it multiple times. I have appealed to him publicly … Donald Trump has not said a word in favor of a stimulus that would truly help cities and states. They are doing nothing.”
If a loan is not secured, the potential city employee layoffs may include EMTs, firefighters, teachers, sanitation workers and more. “It will devastate the livelihoods of people who make this city run,” the mayor wrote. The Mayor noted that similarly in the aftermath of 9/11, New York City was granted a $2.5 billion critical loan to help it recover from the terrorist attack.
The $5 billion loan is already a downgrade from the $7 billion that de Blasio had been negotiating with Gov. Andrew Cuomo and the state Legislature. The funds would be generated by floating long-term bonds, and would need to be paid off in 30 years. “We’re still working on a borrowing plan with Albany, a lot of conversations are going on,” de Blasio said. “But we don’t have anything yet to tide us over … We’ve had extensive conversations.”
The Mayor went on to say that there were still details that would need to be agreed upon in any loan deal. Cuomo has made clear that he would want a state financial control board to oversee the city’s spending practices in case of a loan, as per the Post. De Blasio said he would allow the state to monitor spending — but not to micromanage or to strip the mayor and council’s ability to spend and “determine” the city’s budget.
