With Congress still stalled over a new pandemic related federal relief package, New York Governor Andrew Cuomo, and New York City Mayor Bill de Blasio, are warning of dire consequences for the city and the state if they don’t receive funding to help plug major budget deficits.
Cuomo says several thousand state and local government workers could be laid off, including 7,000 at the Metropolitan Transportation Authority, if the federal government does not provide a bail out to help close the state’s multibillion 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 says 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 de Blasio, who says 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,” de Blasio 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 26 need to be renewed now. He says 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. It has temporarily withheld 20% of some aid payments to local governments and school districts.
The New York State School Boards Association’s Robert Schneider says more than $300 million 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 says districts 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 says they were told recently that the state would not reimburse those costs.
“We are very frustrated with that,” Schneider said.
Cuomo says 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 says 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, says 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 says he’s working with the State Education Department to try get the schools reimbursed for the additional bus trips.
In a statement, NYSSBA said it is “encouraged” by the governor’s comments, and appreciate that Cuomo and Mujica are working with the state education department to get the reimbursement money for the additional school bus trips. The group says board members have sent over 9,000 letters to the Congressional representatives emphasizing the consequences schools face if the 20% in state aid cuts are not restored.
“Our students and our educators are resilient, but they should not have to endure any more educational disruptions than they already have because of this pandemic. Existing educational inequities already are at risk of growing because of uneven access to remote learning and the curtailing of important school programs and activities”, Schneider said, in a statement.
Meanwhile, the pro-taxation group Strong Economy for All, heralded the governors’ comments that new taxes are necessary. But the group urged a swifter response.
“Acceptance is only the first step,” said Coalition Organizing Director Charles Khan, in a statement.