#NYC’s elected leaders haven’t begun to face its economic and fiscal horrors

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The city is in for some truly rough economic times according to reports released last week.
Gabriella Bass

The city is in for some truly rough times, reports last week make clear, and the pain may be worse thanks to ongoing denial from Mayor Bill de Blasio and the City Council.

In a sobering 67-page paper, the Partnership for New York City warns that restarting the local economy will be “far more difficult” than shutting it down, with a bleak picture of a vastly changed city:

• By last month, the region had “experienced more infection, death and economic destruction than anywhere in the world.”

• As many as a third — or nearly 80,000 — of the 230,000 small businesses throughout the five boroughs “may never reopen.”

• An 18.3 percent jobless rate has left up to 1 million households “struggling.”

• Only 40 percent of Manhattan office workers will return by year’s end; 25 percent may never come back, prompting employers to trim space and move jobs out of the city altogether.

• Gotham’s economy is on pace to shrink 7 percent over two years, sparking huge city and state tax-revenue losses. “Significant federal aid is essential” but won’t be enough to fill the gaps.

Meanwhile, the MTA, so vital to the city’s health, is in even more dire straits: “There have been financial crises before, but never one where the deficits were measured in billions on top of billions on top of billions of dollars,” sighs agency boss Pat Foye.

With barely anyone riding the subway during the lockdown, fare revenue all but vanished and new cleaning measures added costs. Fare receipts have climbed but leveled off at about 20 percent of pre-pandemic rates.

State-aid trims and a delay in congestion pricing will cost the MTA even more, leaving a jaw-dropping $16 billion shortfall through 2024. Even if the feds meet its request for another $3.9 billion, that would last only through year’s end.

Faced with such a nightmare, officials are eyeing drastic steps: service rollbacks, job cuts, improvement deferrals and toll hikes. All of which may further dog the region’s economic comeback.

Yet de Blasio and the council refuse to face the similar devastating hit to the city fisc. As a Citizens Budget Commission report notes, last month’s budget plan closed more than half of a multibillion-dollar shortfall by tapping reserves and federal aid — and only 44 percent via less spending. And much of the savings won’t recur, splashing $10 billion in red ink over the next three years. The CBC blasts de Blasio for that and for his “unrealistic projections.”

As if to prove the point, the Independent Budget Office last week calculated NYPD overtime costs alone would run $400 million over budget — and other budget assumptions are just as hyper-rosy.

De Blasio and the council are doing the city a big disservice by kicking the can down the road and avoiding tough decisions now. They may prefer delaying, but New Yorkers will be suffering for longer.