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Is It Really Layoffs or Loans? De Blasio's Other Options to Find $1 Billion


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Mayor de Blasio at a budget presentation (photo: Ed Reed/Mayoral Photography Office)


Mayor Bill de Blasio finds himself in a tricky fiscal situation as the city needs to find $1 billion by the end of the month to balance its budget. Federal aid is nowhere in sight, Albany has so far refused to allow the city to borrow the funds, and state budget cuts are also on the horizon. At the end of his rope, the mayor says he may have to lay off 22,000 municipal workers. But that nuclear option may not be necessary, and there are ways de Blasio could achieve the $1 billion goal that was baked into the city’s new budget without firing thousands of employees during a pandemic-caused recession.

[Read: Where De Blasio's Push to Borrow Billions Stands]

The $88.2 billion fiscal year 2021 New York City budget, passed July 1, was meant to be balanced on a guarantee that the administration could negotiate with labor unions to find $1 billion in recurring savings or resort to layoffs. One-time cuts will not be sufficient as that budget hole is expected to carry forward into the next fiscal year, when the total budget gap will grow to about $4.2 billion. Without those savings, the city will have to implement layoffs, preparations for which have already been made.

The mayor announced on August 31 that layoff notices would be delayed, and that he and union leaders were working to convince the state Legislature and Governor Cuomo to approve legislation allowing the city the ability to borrow $5 billion to balance the current year’s and next year’s budgets. City Comptroller Scott Stringer and Council Speaker Corey Johnson have also come around to the idea of borrowing, but only with controls on spending, lending important voices to de Blasio’s push. Without that borrowing authority, the layoff process will resume, de Blasio said.

However, a variety of fiscal watchdogs say the mayor has alternative paths he could take to get to $1 billion, without risking people’s livelihoods or adding to the city’s already significant debt obligations by borrowing against the future.

Citizens Budget Commission, a nonprofit group, released a report on September 2 that identified more than a dozen viable measures that could substitute for layoffs and borrowing and altogether save more than $1 billion. “The Mayor presents New Yorkers with a false choice: either borrow to fund operations or lay off 22,000 municipal employees,” said CBC President Andrew Rein in a statement. “Neither currently is necessary and both have far reaching negative impacts.”

As CBC also noted, the adopted budget eliminates funds set aside in the city’s labor reserves for future wage increases. “Eliminating the funds essentially means the City’s starting position for negotiations will be a two-year wage freeze,” the CBC report reads, adding that a wage freeze is an “appropriate” step to take, though de Blasio has thus far downplayed the idea. 

Among CBC’s recommendations is a reduction of the city’s headcount – which stands at more than 325,000 full-time and full time-equivalent employees – through attrition. CBC estimated that about 23,000 employees, roughly 7.1%, retire or resign to take other jobs every year. Those employees are also paid more than the most junior workers who would be the first to be let go if layoffs are executed. However, attrition does give the administration less control over which workers leave city employment. CBC also notes that the city could provide early retirement incentives (ERI), though the savings from those are not as high as attrition or layoffs. In 2010, the report points out,14,371 state and local employees agreed to an ERI program, resulting in a net benefit of $681 million over two years.

The best method for finding new and recurring savings would be to make changes to health insurance costs, CBC recommends, particularly by requiring municipal workers to contribute to health care premiums, which could save between $531 million and $1.1 billion annually depending on the level of contribution required. Employees currently pay nothing into those premiums. “The generosity of this benefit also exceeds that of other state and local governments,” the report notes. It also calls for premium sharing for pre-Medicare retirees, and eliminating a reimbursement for certain Medicare benefits which could save $400 million each year, among other reforms.

CBC recommends several changes to union work rules to create more productivity savings, including extending a civilian overtime cap to skilled trades and uniformed workers and standardizing work hours.

The Independent Budget Office, a nonpartisan city agency, does not make judgements on the administration’s proposed plans but it has recently highlighted a series of its prior reports from December 2018 that cover a myriad of savings options the city could employ. Though, many of those numbers are estimates based on the costs of specific programs that are likely affected by the larger budget crisis.

IBO makes many of the same recommendations as CBC on cutting wage and benefits costs, particularly for health care. It estimated that the city could save $590 million from requiring health insurance contributions by current employees and retirees.

Among other steps, the city could cut down on subsidies, including by diverting paratransit trips to taxis, eliminating $70 million in annual city funding for nonpublic schools, and by ending the Department of Education’s role as a sponsor for the Fashion Institute of Technology, a SUNY community college, which costs $58 million each year.

Certain programs could be eliminated or amended, such as assessing only half of school buildings every year rather than all of them, which would save $7 million and still meet state requirements, saving $29 million each year by using open source software instead of licensed software, and raising $17 million annually by requiring landlords to get operating permits for rental buildings similar to restaurant permits.

IBO also offers that the city could also change staffing and work rules. Consolidating building, fire, environmental protection, and housing inspections would save $25 million each year. Eliminating paid union release time (where the city pays union workers for their time spent on union activity) would save $30 million in the first year. The administration could also increase the workweek for about 76,200 nonmanagerial, nonschool based, full-time civilian employees from 35 or 37.5 hours to 40 hours a week, and thereby reduce the city’s overall headcount since it would need 12.5% fewer workers to cover the same number of hours. That change could lead to $234 million in savings in the first year, growing to $767 million over three years, though it would require collective bargaining.

There are reimbursements the city could demand from the state for temporarily housing technical parole violators in city jails and for holding pretrial detainees in local jails for more than one year.

James Parrott, an economist at The New School's Center for New York City Affairs, said in a phone interview that an early retirement package may be the “single most essential thing” that the mayor could provide to avoid layoffs or loans, though it may not bring in the entire $1 billion. “The mayor and the unions really need to double down on that,” Parrott said.

Parrott did propose a few other ideas, though the mayor does not have unilateral power to implement them. Chiefly, he said the city and state should reconsider large property tax exemptions that have been provided to developments like Hudson Yards. The Hudson Yards exemptions, in particular, he said, are “really hard to defend” given the city’s fiscal crunch and the fact that it serves the types of industries that have been relatively unscathed during the pandemic compared to the larger economy.

“Those were not necessary when it was developed. They're certainly not necessary now,” he said of the tax exemptions. “There's nothing to prevent the city from trying to get the Hudson Yards developers to agree to that. They can't dictate it. They'd have to get their acceptance of that. But I think they need to start turning up the pressure on that.

Parrott questioned whether long-standing properties like Madison Square Garden, Yankee Stadium, and Citi Field should continue to get similar property tax breaks. “All of those entities are owned by billionaire owners who should be contributing to the city's plight at this time,” he  said.

He did defend the mayor when it came to the city’s massively increased budget and headcount, which he said have not grown beyond what should be expected or necessary when the economy grew at such a substantial pace at the same time. “More economic activity in New York City means greater need for public services,” he said.

Nicole Gelinas, senior fellow at the think tank the Manhattan Institute, has said the city needs to both institute a wage freeze as well as cancel $1.5 billion in back pay for teachers which it is expected to pay out in October.

“No public sector employee should expect a private sector tax base that has now lost more than 900,000 jobs in New York City to support wage increases for the public sector workforce,” she said at a virtual discussion hosted by the Manhattan Institute in May. At the time, she called on the administration to enact furloughs to preempt more harmful layoffs come Fall. She also called for a pay cap, including for nonunion workers, such as top city agency staff who make well into the six figures. “Forcing public servants to live temporarily within a salary that is comfortable even for New York City — especially since many households have more than one earner — isn’t just symbolic,” she wrote in the New York Post on July 5. “It would save $200 million a year, ­according to an analysis of raw data provided by SeeThroughNY. That’s a whole fifth of the $1 billion in draconian cuts the mayor warns he will have to make.”

Some elected officials have also floated ideas that could cut city spending without terminating workers or affecting services. For instance, City Council Member Ben Kallos, who chairs the contracts committee, proposed in June that the city could save $15 billion by eliminating tax exemptions for real estate developers and by eliminating waste in city contracts, according to a Daily News report.

Prior to the passage of the new city budget, the City Council had called on the mayor to institute between 5-7% in cuts at all city agencies. To balance the budget, the administration found only about $2.8 billion in cuts through a Program to Eliminate the Gap (PEG) and citywide savings, which the Council found insufficient.

At the time, Council Speaker Corey Johnson and Council Members Daniel Dromm and Vanessa Gibson, chairs of the Committee on Finance and Subcommittee on Capital Budget, respectively, warned the mayor in a May 30 letter that without savings, the city would have to rely on incurring costly debt. “[W]e must search agency budgets for more savings to ensure that we have done everything we can to balance the budget without resorting to borrowing that will have significant long-term implications for New York City’s future,” they wrote.

Comptroller Scott Stringer similarly noted that most of those savings were one-time reductions instead of recurring savings that could help offset budget gaps in the future. In his May 21 testimony to the City Council on the mayor’s executive budget, he had called for a 4% reduction in agency spending that would save almost $1 billion a year. “Not only do these one-time cuts leave our City’s youth high and dry this summer – they also don’t translate into longer-term savings,” he said at the time. “In fact, recurring savings are only a small fraction of agency budgets — because the Mayor simply didn’t ask most agencies for recurring savings at all.  Too much agency spending is simply on auto-pilot.  But it’s no longer possible to do business as usual.”

Stringer has also proposed cuts in other places, including spending on outside consultants, street homeless outreach, and the ThriveNYC mental health initiative, according to a City & State report.

Brooklyn Borough President Eric Adams, in June, proposed a recovery plan for the city that dealt with varying levels of budget deficits while also addressing a growing call for diverting funds from the NYPD’s $6 billion annual operating budget. Among the proposals he put forward included civilianizing over-staffed NYPD units, cuts to overtime, and forensic audits of the department’s notoriously opaque spending. Adams also recommended eliminating political appointees who serve in advisory or administrative roles, expanding the role of franchises that can build infrastructure and receive multi-year service contracts in exchange, among a series of other suggestions.

And in order to bring in new revenue, a discussion mostly happening at the state level around added taxes on the highest earners or certain financial transactions, Adams is working with State Senator Andrew Gounardes on a set of proposals for new data sales taxes on multi-billion-dollar tech companies that sell private data.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Jury Still Out in Several Investigations of NYPD's Protest Policing


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NYPD officers; the department remains under multiple investigations (photo: Edwin J. Torres/Mayor's Office)


The New York City Department of Investigation (DOI) and Law Department have missed the August 31 benchmark set by Mayor Bill de Blasio to submit a final report in their joint investigation into the NYPD's response to summer protests that broke out in the aftermath of the killing of George Floyd by Minneapolis police.

Officers' frequently violent engagement with demonstrators marching against police racism and brutality led to hundreds of allegations of police misconduct and excessive force, and numerous city and state investigations, none of which have made final determinations.

In the days after Floyd's killing on May 25, peaceful marchers were corralled, beaten with batons, and arrested by NYPD officers; pepper spray was commonly used, even on nonviolent crowds; officers drove their vehicles into protesters and used helicopters to whip-up debris around them; many officers covered their badge numbers; and many didn't wear masks, against city and state guidelines, in the midst of the first widespread public gatherings of the pandemic.

The demonstrations were accompanied by destruction on the part of some protesters and others who appeared to take advantage of the moment of chaos, with police cars smashed and burned and sprees of looting. Meanwhile, persistent questions were raised about the degree of systemic police aggression. De Blasio and Police Commissioner Dermot Shea frequently discussed violence perpetrated upon NYPD officers while also offering unproven allegations of the dangerous presence of "outside agitators" and plots to harm police. They largely dismissed clear evidence of repeated incidents of unprovoked use of force by police, though in a few instances both condemned specific officers’ actions.

After two days of unrest in New York City, Governor Andrew Cuomo asked Attorney General Letitia James to investigate the NYPD's response. The same day, de Blasio said the city would conduct its own "independent review" of police-civilian interactions and the next day, May 31, he announced Department of Investigation Commissioner Margaret Garnett and Corporation Counsel Jim Johnson would lead the investigation. The NYPD is conducting its own misconduct investigations through its Internal Affairs Bureau, as well as a broader analysis by the department's operations unit and top leadership, including Shea and Chief of Department Terence Monahan. Separately, complaints from the public have initiated hundreds of investigations by the Civilian Complaint Review Board.

"The whole idea of having an independent review is to look at all the video and determine discipline for anyone who needs it, actions that should be taken additionally towards those who incited violence amongst the protesters, and any changes we need in our approach to policing," de Blasio told reporters when he announced the investigation.

"The first results will come back in June and we'll take action immediately on the initial findings," the mayor said.

On June 20, he signed an executive order outlining the scope of the investigation, in which he directed the two entities to assess the NYPD's "planning and response to the protests" and make factual findings about the events. The order also directs the Corporation Counsel to conduct a separate review of "the factors that may have impacted the events at protests" during the period under review from the first demonstrations on May 28 to the date of the order. (Members of the Office of the Inspector General of the NYPD, which is housed within DOI, are part of the team conducting the investigation, according to a DOI spokesperson.)

The order calls for a status report and for the agencies to "make best efforts to produce a final report on August 31, 2020."

But protests continued for weeks and in a June 24 letter to the mayor and other elected officials Garnett said the timeline was too short to analyze a period over 20 days long. Other investigations, either by the NYPD's Internal Affairs Bureau or by District Attorneys, also hampered the review, she wrote. "If there is to be individual accountability for officers involved in specific incidents, the disciplinary process and criminal investigations must be given precedence," Garnett wrote.

On September 1, DOI spokesperson Diane Struzzi told Gotham Gazette the investigation was still in progress.

"As we indicated in our June statement, the investigation is active and ongoing and DOI would endeavor to meet an August 31, 2020 deadline requested by the Mayor's Executive Order, but that the timing of the report, or series of reports, would be determined by the fact-finding process and the status of parallel proceedings," she wrote. "That has not changed."

"As we indicated in our June statement, until the completion of this investigation, DOI will not comment publicly on the investigation’s status, or provide updates to City or elected officials on our findings, unless unforeseen circumstances arise that warrant a further update," Struzzi added.

"This is vital work. We are committed to getting it right," wrote a Law Department spokesperson in an email.

The mayor's office did not provide a comment on the missed deadline.

De Blasio and Shea have also said there needs to be discipline for officers who committed specific transgressions during the protests.

"I want to see real action quickly on individual cases of discipline that need to be addressed," de Blasio said on May 31, the same day he announced the Law Department-DOI review. "I want to see real action on any officer who should not be in the police force, real action on any officer who needs to be transferred from one command to another because of performance and approach. These can all happen immediately and they will."

The NYPD did not respond to Gotham Gazette inquiries about its internal review of misconduct during the protests. At least two officers have been suspended without pay and one supervisor transferred to another precinct, according to Shea in June. One of the suspended officers has also been criminally charged with assault after he shoved a demonstrator into the curb in a particularly high-profile incident, which was caught on video and went viral on social media. His supervisor, who was present at the scene of the crime, was transferred for failing to take action. Another officer, who was caught on film pulling the mask off a protester to pepper spray them at close range while their hands were up, was suspended without pay.

The Civilian Complaint Review Board, a city entity with board members appointed largely by the mayor and tasked with investigating certain allegations of police misconduct, received over 750 complaints stemming from 250 separate incidents during the protests, a spokesperson said. According to initial figures provided by the CCRB, roughly one-third of those complaints are for inappropriate use of force, and one in five are claims that officers abused their authority.

“I strongly believe what New Yorkers saw during the protests in support of Black lives warrants fact-based, independent, civilian-led investigations into allegations of individual misconduct," wrote CCRB Chair Fred Davie in a statement to Gotham Gazette. "The CCRB is undertaking these investigations, and will be making disciplinary recommendations in the near future.”

The CCRB has the power to make recommendations for discipline when it substantiates misconduct claims, but the police commissioner retains ultimate decision-making powers about punishment.

The CCRB spokesperson told Gotham Gazette that information on final determinations, if there are any, are not available at this time.

In addition to the incident where a protester was violently shoved by an officer, district attorneys have launched several criminal investigations into other police actions.

At the state level, Attorney General James is performing a parallel investigation into NYPD behavior during the protests at the request of Governor Cuomo. The directive, issued on May 30, after two nights of demonstrations, called for the attorney general to issue a public report within 30 days.

That investigation is still ongoing, according to a spokesperson for James. In June, she held multiple day-long hearings to solicit testimony from New Yorkers who protested, some of whom testified to police brutality, as well as Shea. The police commissioner testified that officers exercised "extreme discretion" when dealing with protesters and that many of the aggressive tactics witnessed were in response to dangerous situations created by protesters. He said he had not heard of "kettling" -- a strategic maneuver in which lines of officers cordon and charge a barricaded crowd -- which was common throughout the first week of protests.

On July 8, James held a press conference announcing a preliminary report, in which she made a series of recommendations for police reform. But James prompted confusion and criticism for not making any material determinations about the behavior of police during the protests.

"I don't know if we were tasked with the ability to judge the police," James told reporters. "We were tasked with the responsibility of looking at the interactions between police and protesters during a certain period of time."

"While OAG’s investigation into NYPD’s response to the protests remains ongoing, it is clear that real, meaningful reform cannot wait," reads a statement accompanying the report. The recommendations range from major changes to NYPD structure to more frequently sounded calls.

At the top of the list is the creation of a commission to oversee the police department with the power to hire and fire the commissioner. The preliminary report also suggests the CCRB and Office of Inspector General of the NYPD (which is within DOI) both be strengthened and certain public-response duties be moved away from the NYPD. James also wanted to see codified use of force standards "with real legal consequences for violations" (per legislation passed by the City Council and signed by the mayor, the city published a "disciplinary matrix" on Monday, with a mandatory range of punishments for certain officer misconduct).

James’ final report will include an assessment of police use of force and kettling tactics, arrest practices (including the use of "extremely tight zip-tie" handcuffs), and the treatment of members of the press, legal observers, and essential workers, according to a statement from her office.

In terms of passing judgement on the NYPD's actions, James demurred.

"Well I do know that the testimony of Police Commissioner Shea was at odds with the vast majority of the protesters who came before us," she told reporters at a July press briefing. "And so what we are trying to do is continue to examine the testimony."

"Other protesters have come forward and submitted additional evidence,” she added, “and we are still in the process of examining all of the evidence before us.”

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

Read more by this writer.

Where De Blasio's Push to Borrow Billions Stands


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The Financial Control Board meets (photo: Benjamin Kanter/Mayor's Office)


Mayor Bill de Blasio has until the end of September to present a state fiscal oversight body with a plan to find $1 billion in savings that will help balance the city budget for the current fiscal year. In lieu of a federal aid package to help replace lost tax revenue due to the coronavirus pandemic, the mayor and labor union leaders are pushing the Legislature and Governor Cuomo to allow the city to borrow billions of dollars to cover operating expenses, a proposal that many city and state leaders have generally balked at but might soon be seen as necessary if the city wants to avoid thousands of municipal layoffs.

Both City Comptroller Scott Stringer and City Council Corey Johnson initially opposed a borrowing plan but have warmed up to it in recent weeks. State Comptroller Tom DiNapoli has pointed out that the de Blasio administration has yet to lay out a detailed plan that takes into account uncertainties, particularly about future revenue. Legislative leaders have similarly demurred on giving their approval, while Cuomo has expressed opposition to the idea.

The approval of the $88.2 billion city budget for the 2021 fiscal year, which began July 1, was predicated on the mayor’s promise that he would negotiate with labor unions to find $1 billion in recurring savings going forward or be forced to resort to mass layoffs. By October 1, the mayor has to present that savings plan to the state Financial Control Board (FCB), which monitors the city’s fiscal practices.

Short of identifying those savings, and without federal stimulus funds, the mayor has warned that the city will be forced to lay off roughly 22,000 municipal employees. Preparations for those layoffs began last month and, on Monday, the city was meant to send out 30-day layoff notices to workers. But the mayor said he would delay that process as discussions with union representatives continued and as labor unions sought to convince state leaders about the borrowing plan. “What our labor partners asked for is time to bring back the Legislature, to talk to the Legislative leaders and members and ask them to come back on an urgent basis,” de Blasio said. “I've said we will work with them on that, but it's going to be a day to day basis.”

Even as he held out some hope for federal help, the mayor has for months pursued long-term borrowing permission from Albany, which he now argues is essential to overcoming the city’s fiscal woes. Since May, he has been asking the Legislature to authorize borrowing to pay for the city’s operating expenses. His latest plan is to borrow $5 billion, to be paid off over 30 years. The mayor has expressed confidence that the city’s tax revenues, including personal income tax, will rebound as the city recovers and will be able to accommodate the added debt. He specifically said that he expects property taxes, which are an important base of revenue, to remain strong.

According to a spokesperson for the Mayor’s Office of Management and Budget, the city would add about $70 million in annual debt payments for every $1.5 billion borrowed. For the current fiscal year, the city’s debt payments amount to $7.4 billion, and will increase to $8 billion for the next fiscal year. Paid through the annual operating budget, the debt service payments are virtually all for capital expenses.

The $5 billion would not only cover the labor savings for this year but also nearly the entire expected $4.2 billion budget gap for the next fiscal year. In order to come within the $1 billion of closing this year’s gap, de Blasio dipped significantly into the city’s reserves, using $4 billion of roughly $6 billion the city had set aside.

At his daily news briefing on Thursday, de Blasio reiterated the call for borrowing, warning that the city also faced the prospect of budget cuts from the state, which has its own $13.3 billion fiscal gap to worry about. That includes $8.2 billion in state aid to localities for education and healthcare, among other things.

“[O]ur central concern, of course, is where is the federal government with the stimulus? Well, nothing yet. Where is the state government with long-term borrowing? Nothing yet,” de Blasio said.  “In fact, there's a threat of cuts from the state government that will cause us to have to cut even more New York City personnel...Let's get to the work of figuring out what is healthy and safe for New Yorkers. And then let's get to the work of giving us the resources to actually protect people. And what Albany needs to do is give us that long-term borrowing authority.”

The city has lacked the power to unilaterally borrow funds for operating expenses since the state passed the Financial Emergency Act in 1975, when the city overleveraged itself to the brink of bankruptcy, in part by borrowing for operating expenses. That legislation, which also created the Financial Control Board, was meant to rein in the city’s shoddy fiscal management and ensure that the budget was balanced each year. The city could only plan to spend as much as it expected to receive in revenue. Borrowing authority was last granted to the city after 9/11, when the city was given permission to borrow as much as $2.5 billion, though it did not avail of the full amount.

The lessons of the 1970s, however, haven’t faded, which is why Cuomo, the state Legislature, and fiscal watchdogs have all been reluctant to support the mayor’s recent borrowing proposition.

Cuomo’s office did not respond to a request for comment for this article, but in May he said it was a “fiscally questionable” notion. On June 29, the governor again made it clear that he has misgivings about the proposal. “What is the loan? How do you pay it back? What is fiscally responsible?” he said. “Borrowing in of itself is not a great thing, but it’s not a bad thing. The question is how much? How are you going to repay it? What do you think is going to happen with the economy?” As governor, Cuomo chairs the Financial Control Board and has recently taken more of an interest in its workings. As NY1 reported in July, Cuomo nominated three close associates to the board – former Secretary to the Governor Steve Cohen, former City Comptroller Bill Thompson, and sitting Secretary of State Rossana Rosado – who were all confirmed. The board’s other three members are de Blasio, DiNapoli, and Stringer.

Assembly Speaker Carl Heastie has expressed support for giving the city borrowing authority, according to a NY1 report. Senate Majority Leader Andrea Stewart-Cousins, on the other hand, has been circumspect to approve the city’s borrowing proposal, but has also not ruled it out entirely.

“As we have said from the beginning we are willing to work with New York City to identify the best course forward without hurting working men and women and at the same time pursuing a fiscally responsible course,” said Mike Murphy, communications director for the Senate majority, in a statement to Gotham Gazette.

In a June 27 statement, Stewart-Cousins had also said the Senate was “open” to allowing limited borrowing authority, but stressed the need for more detail from de Blasio. “Prudence requires the development of a plan not rushed through before action is actually necessary, especially when the possibility of additional federal aid remains unresolved,” she said at the time, noting that there were still several months until layoffs were on the table.

Spokespeople for Heastie did not respond to a request for comment for this article.

DiNapoli has significant reservations about the city being granted borrowing authority. “There are too many unanswered questions right now to say if borrowing would be prudent,” he said in a statement. “Those unanswered questions include whether this year’s balanced budget will hold, whether there will be additional federal aid, whether economic progress will ease budget gaps in the out-years or whether the risks I and others have identified will make the situation more difficult. We certainly know that in the long-term, borrowing your way out of a problem, and committing future budgets and burdening future taxpayers, is not the best solution if it can be avoided.”

Stringer, who had previously warned against the amount of total debt the city could take on if it borrowed in the billions, recently seemed warmer to the idea. But he nevertheless emphasized that it would have to be approved with strict controls and an airtight spending plan, which, if it exists, the mayor has not presented publicly and his office did not provide to Gotham Gazette despite a request.

“We are in an unprecedented economic crisis, and so far the federal government has walked away from its responsibility to provide the relief we need,” Stringer said in a Thursday statement to Gotham Gazette. “The mayor needs to stop threatening to fire frontline workers and propose a transparent, comprehensive financial plan with borrowing as one component to balance our budget and protect workers while preventing irremediable damage to the economic and social fabric of our City. The mayor doesn’t get a blank check.”

De Blasio has said that he does not want carte blanche to spend all $5 billion and that the long period of repayment will impose a manageable burden on future budgets. “We do not want to use that authority if we don't have to,” he said Thursday. “For example, if a [federal] stimulus was passed and made us whole, we wouldn't borrow at all. If we only needed to use a small amount of the borrowing, we would use a small amount. But when you're talking about repayment on a 30-year basis, the debt service is quite modest. It does not change the fundamental reality of the budget.”

Fiscal watchdogs have argued that the city need not borrow funds nor implement layoffs to close the $1 billion budget gap. The Citizens Budget Commission, a nonprofit group, released a report on Wednesday that recommended a series of steps including reducing the costs of employee benefits (particularly health care spending) and implementing broader productivity reforms.

There are also several bills before the state Legislature that would increase taxes on the wealthy to raise more revenue, but they have been resoundingly rejected by the governor who has warned that it may drive high-income residents out of the state. Surprisingly, de Blasio has shared a similar sentiment despite his long-standing support for such taxes. The Democratic majorities in the two legislative houses have been in talks aimed at deciding which revenue-raising measures to pursue.

City Council Speaker Johnson has also recently shifted his opposition to long-term borrowing and has said the Council will discuss and vote on a resolution, sponsored by Council Member Helen Rosenthal and introduced on August 27, calling on the state Legislature to approve it. “Layoffs should be a last resort,” Johnson said in a Thursday statement to Gotham Gazette. “The State should give the City borrowing authority to avoid layoffs. That does not mean the City should not look for savings where it can.”

“I think that New York City deserves the authority to borrow funds to meet our immediate needs given the impact of COVID-19 on our revenue,” Johnson said at an August 27 virtual news conference. “When we do borrow, it needs to be responsibly to avoid the absolute worst options becoming our only options like a significant number of layoffs for workers and families at the height of a dire economic recession.”

The Council hearing on the resolution will be on September 21, and it may be voted on in committee and, if it passes there, by the full Council later that week.

Brooklyn Borough President Eric Adams, also a Democrat and likely mayoral candidate like Stringer and Johnson, told Gotham Gazette he too beleives the city should be granted borrowing authority, but he also offered caveats and criticism. “Because the City has waited to find necessary cost savings, Washington is failing New York, and we must not balance our budget on the backs of Black and Brown New Yorkers, I believe some borrowing may now be necessary to avoid even deeper inequality," Adams said in a Friday statement. "However, the City must also explain its plan to pay the debt and find a dollar in savings for every dollar borrowed. I believe we can identify these savings without laying off City workers or cutting vital services on which lower-income New Yorkers depend. We also must consider temporary revenue raisers like an ultra-millionaires tax and a fairer property tax system.”

Public Advocate Jumaane Williams has also lent his support to long-term borrowing, stressing that it would help prevent cuts to crucial services for New Yorkers. “This is a fiscally-sound and clearly-necessary strategy to meet the current economic crisis without further irreparable damage to vital programs and the New Yorkers who rely on them,” he wrote in a June 28 op-ed for Gotham Gazette, just prior to the passage of the city budget. “Borrowing is not a radical idea. Unlike short-term borrowing, it is not an imprudent proposal. In past crises, we have taken on long-term debt and been able to move forward and build a strong recovery. I believe we must do so again, and fear if we do not, that recovery will not come.”

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by Samar Khurshid, senior reporter, Gotham Gazette
     

Read more by this writer.

Note: this story has been updated with comment from Eric Adams and info on the hearing on the City Council resolution, and then updated with a new date for the Council hearing on the resolution.



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