New York City has come a long way from precarious position in late 2020, when the budget deficit was “Nightmare scenario” things that have ceased to appear since the 1970s, and increase COVID-19 the number of cases that caused the reopening to be halted again.
Since then, the city has received nearly $ 6 billion in direct aid from the latest federal stimulus package in March, $ 12 billion for its schools, federal aid with rollout Vaccines and stimulus funds will come from the part of the New York state agreement. Meanwhile, the federal government has pumped a $ 6.5 million into the state-run Urban Transportation Authority, which runs the city’s subway and bus system.
The city is also no longer suitable costs related to the pandemic that is usually paid for by FEMA and the federal government, but not with the Trump administration.
“The most important fact is that all charges reimbursed by FEMA will now be 100% reimbursed,” New York City Council member Helen Rosenthal, who sits on the Council’s Finance Committee and represents for the Upper West Side, tell MarketWatch. Under the Trump administration, only 75% of the costs were reimbursed, “So last budget was reduced by $ 1 billion or $ 2 billion because we had to assume FEMA wouldn’t do it all,” Rosenthal said.
After years of grappling with the Trump administration’s efforts to withhold federal funding from the city, the current political climate in Washington, DC, represents a dramatic face to New York’s destiny at the federal level, with Democrats now controlling all three branches of government. and New York Sen. Chuck Schumer in a position of power as Senate Majority Leader.
By contrast, in April 2020, at the height of New York City COVID-19 crisisThe leader of the Senate Majority was then Mitch McConnell It is suggested that countries struggling with the financial burdens of the pandemic should consider bankruptcy rather than seeking federal aid.
“The New York City outlook looks better with Washington’s new incarnation in the White House as well as on Capitol Hill,” New York State Senator John C. Liu, a Democrat, chairman of the Commissioner New York City Board of Education and represents northeastern Queens. “New York City won’t necessarily get special favors, but Democrat control over both homes and the White House bodes well for metropolitan areas across the country on issues. from traffic to housing, and along that, New York will benefit. ”
While a new one passed $ 212 billion New York state budget It includes plans to increase revenue through tax increases for the wealthy and to bet on sports online, and is designed to help revive state and city economies through items such as relief. For struggling tenants and tax credit for small businesses, the long recovery process can turn into a sluggish person. (Governor Andrew Cuomo’s office did not respond to a request for comment.)
“It will be a painful year or two. The irony is though [finance and tech] Says Mitchell Moss, professor of urban policy at NYU and director of the Rudin Transportation Center. “Once you had 100 people [in the lobby of office buildings] delivery of meals to traders. “
More than 20,000 New Yorkers applied for unemployment by the week of March 27, an increase of 283% from the same period in 2019, according to Investopedia’s New York City Recovery Index. Before passing the stimulus bill in March, Mayor Bill by Blasio Announce the budget for the year 2022 based on an expected budget gap of $ 5.25 billion.
“The job loss is serious because we don’t know how quickly Broadway theaters will recover, if people will go back to work three, four, five days a week,” Moss continued. “For the MTA, it will take a few years to rebuild the ridership. MTA needs enough [funding] to overcome the decline in riders and now, and they have to focus on rebuilding the number of riders ”.
All said, MTA has received $ 14.5 billion in federal aid since the start of the pandemic, but significantly more is needed to prevent major cuts. President Biden’s upcoming infrastructure act, the U.S. Employment Act, now includes a $ 85 billion allocation to existing vehicles, and MTA officials hope a portion of that will help. fund the $ 51 billion program 2020-24, Crain reports.
“The MTA will need an additional $ 8 billion by the end of 2021 to prevent the dismantling of the wholesale system,” Liu said. “Because President Biden has included 6 billion dollars for the MTA in [most recent] In the stimulus package, the MTA was able to cut out some truly dreadful cuts. I can say with certainty [additional funding] are now more likely than they were a few months ago. “
More broadly, the city’s ongoing financial recovery may depend on some degree of continued federal aid, and politicians and analysts have raised concerns about how the One-off relief is being implemented in long-term financial plans.
To meet the latest state budget, the non-profit financial watchdog group Citizen Budget Committee issue a statement “The budget went up dramatically and rapidly, temporarily soaring due to one-time federal bailout, and it does not have the systemic improvements needed to make recurring spending sustainable. and maximizing New York’s competitiveness. “
The Mayor de Blasio’s office did not comment for the article, but during a news conference Wednesday de Blasio called the budget “the best state budget we’ve ever seen for New York City”. and “the working-person budget first,” citing in particular additional funds for the city’s public schools.
On how infrastructure and stimulus grants are distributed, Liu said, “Federal funding should be used to supplement the continued efforts of city and state funding. , not replacing what is normally financed by the city and state ”.
Ana Champeny, city research director for the Citizen Budget Commission, told MarketWatch that using the current stimulus funds strategy “could help you with long-term fiscal stability.”
“Offer other options where you dedicate those resources to new programs or increase spending that you’ll later have to cut back, or set up programs for which you don’t have recurring funding, not is a wise move, ”she said.
With federal funding coming in installments (and often weekly or monthly for controversial Washington negotiations) and the nature of New York’s recovery still changing, much about its future. The city’s key – and what it needs and can expect from the Democratic Leadership in Washington – is still to be seen.
“You’ve got a lot of money for the city, for the state, for the education system,” says Champeny. “There is no rush to do something else. I think [the city’s government] need to use it, plan, track recovery, then find out if the city has a more permanent structural change, and what that means. “
In the short term, much of the city’s recovery is likely to depend on the rate at which it is controlled COVID-19 and a significant number of the population are vaccinated. (The state expanded eligibility to all New Yorkers over the age of 16 this week, and more than 4.6 million doses are now being administered in the city, de Blasio said on Thursday.)
“The most important thing the city and the mayor can do is make the city’s public health system work and everyone get vaccinated,” says Moss. “If we can make the city safe, people will come to New York because it’s an experience you can’t get anywhere else. It’s still the most efficient place to do business, and in the long run, New York will be very powerful. ”