#The best fix for NY gov’t budgets: Juice the economy

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NYS Comptroller Tom DiNapoli warns of major state and city budgets problems due to the economic costs of the pandemic.
David McGlynn

State Comptroller Thomas DiNapoli is warning of major problems with the state and city budgets, the result of the same pain: a virus-plagued economy.

Which suggests the obvious top priority: boost the economy — at least much as possible during the pandemic.

DiNapoli’s report, out Tuesday, is blunt. The lockdowns cost Gotham more than 944,000 positions in March and April. Unemployment soared from 3.4 percent in February to 20.4 percent in June.

The weak economic activity under the lockdowns, in turn, sparked a massive dip in tax collections for the city — and the state, too, since its economy is largely driven by the city’s.

DiNapoli warns that it may take years to get back on track, but de Blasio’s budget — even with its projection of a $9.6 billion revenue loss over two years — takes a likely too-rosy view of the recovery, counting on “a strong rebound next year, with record job gains and strong growth in nonproperty tax collections (14.1 percent).”

It also “assumes $1 billion in recurring labor savings, but the city has yet to reach an agreement with the municipal unions.”

And it cuts funding for police overtime without making clear how it will manage that without harming public safety.

“The Office of the State Comptroller urges the City to prepare additional actions to balance the budget,” DiNapoli warns.

The best step to take, of course, is to get those tax collections back up, by allowing the economy to refire. Instead, de Blasio is intent on driving the economy further into the ground — and wealthy, already heavily taxed Gothamites out of town. After Gov. Andrew Cuomo warned this week against raising taxes on the rich, Hizzoner actually piped up to back the idea.

“I was troubled to hear this concept that because wealthy people have a set of concerns about the city that we should accommodate them,” he said. “That’s not how it works around here anymore.”

Hello? People with money spend it, spinning off revenues that can help shore up the city’s budget. Why not do what you can to keep those people here?

Meanwhile, the city’s supposedly in its final phase of reopening, yet neither de Blasio nor the governor will even give still-shuttered businesses (indoor restaurants, gyms, malls) any idea of when they can reopen. How’s that helping the economy?

DiNapoli also blasts the mayor for not keeping spending in line with reality, given the revenue loss.

Yes, COVID means restrictions. But officials should be moving mountains to do whatever they can to perk up the economy. Doing so won’t just help their bottom lines, but the Jane and Joe New Yorkers’ as well.