With Congress still stalled over a new pandemic related federal relief package, Governor Andrew Cuomo, and New York City Mayor Bill deBlasio, are warning of dire consequences for the city and the state if they don’t receive funding to help plug major budget deficits.
Cuomo said several thousand state and local government workers could be laid off, including 7000 at the Metropolitan Transportation Authority, if the federal government does not provide a bail out to help close the state’s multi billion dollar budget deficit.
He also predicts that there will be tax increases. In a briefing with reporters, though, he did not specify what kind of taxes. Many democrats in the legislature have long advocated for raising taxes on the state’s wealthiest residents.
Cuomo said he also won’t rule out borrowing money if Congress does not come through with a plan.
“If we do not get federal funding, the consequences are going to be devastating,” Cuomo said.
Cuomo was joined, in a rare show of unity, by New York City Mayor Bill deBlasio, who said the funding delay is an insult to the families of the thousands who died when New York was the epicenter of the disease in the spring.
“The State of New York has gone through hell,” deBlasio said. “You have to have support for the state government.”
The President of New York State’s AFL-CIO union, Mario Cilento, also joined the Zoom call, saying the additional federal unemployment benefits that run out December 26th need to be renewed now. He said many don’t have the money to pay for food and rent, or buy holiday gifts for their children.
“It kills me to think that so many New Yorkers are going to have to disappoint their children this year,” Cilento said.
Cuomo’s budget office has reduced spending to try to control the deficit, now estimated at $15 billion dollars. They have temporarily withheld 20% of some aid payments to local governments and school districts.
The New York State School Boards Association’s Bob Schneider said more than $300 million dollars in payments owed to schools were held back over the summer.
“Thankfully it’s only withheld at this point, it’s not a cut,” said Schneider, speaking via Skype. “So we hope we see that money getting distributed to school districts eventually”.
Schneider said schools also incurred additional expenses when the schools were closed due to the pandemic earlier this year. They used school buses to distribute food to children who were on free or subsidized meal programs. He said they were told recently that the state would not reimburse those costs.
“We are very frustrated with that,” Schneider said.
Cuomo said he’s withheld the 20% in aid payments because the state doesn’t have the money right now, and needs that amount from the federal government.
“If they give it to us, then were are made whole,” said Cuomo. “And they would receive the full funding.”
But Cuomo said if there’s only a partial reimbursement form the federal government, then he’ll have to take the other steps, including raising taxes.
“I believe we’re going to have to raise taxes at the end of the day, in any event,” Cuomo said. “But the question is, how much in taxes?”
The governor’s budget director, Robert Mujica , said the state has not withheld aid from schools in the fall payments, but may have to again by the close of the state’s fiscal year, if no federal aid comes through . Mujica also said he’s working with the State Education Department to try get the schools reimbursed for the additional bus trips.
Meanwhile, the pro taxation group Strong Economy for All, heralded the governors’ comments that new taxes are necessary. But they urged a swifter response.
“Acceptance is only the first step,” said Coalition Organizing Director Charles Khan, in a statement.
