CBC Urges State Legislative Leaders to Reject Borrowing Bill for NYC
Dear Senate Majority Leader Stewart-Cousins, Assembly Speaker Heastie, Senate Minority Leader Flanagan, Assembly Minority Leader Barclay, Senator Krueger, Assemblymember Braunstein:
I urge you to reject S.8418/A.10520, which would permit the City of New York to issue long-term debt to pay for operating expenses and offset revenue losses the Mayor deems related to the COVID-19 pandemic. While the City arguably faces its biggest fiscal crisis in generations, City leaders have not yet taken sufficient action to reduce expenditures, which is necessary before borrowing for operations is considered. Borrowing at this stage in the crisis would relieve City leaders from their responsibility to make the hard choices necessary now to manage the City budget in this time.
The New York City Executive Budget released in April shows a tax revenue shortfall of $7.4 billion over two fiscal years; nevertheless, spending cuts were just 2.1 percent of city-funded spending in fiscal year 2021. In fact, city-funded spending will continue to grow in fiscal year 2021 and the City projects an increase in the size of the city workforce between fiscal years 2021 and 2024. This does not demonstrate the assertive approach necessary to tackle the City’s serious fiscal problems, and borrowing for operating expenses should not be authorized as an “easy way out” of making hard choices.
Borrowing obligates future New Yorkers to pay for today’s services and constrains resources available for future needs. It should only be used as a last resort after other actions are exhausted and federal aid proves insufficient. While the economic decline and recovery may prove worse than currently forecast, the State Legislature should not consider granting borrowing authority until the City has exhausted options for balancing the budget that do not irreparably harm today’s New Yorkers and the city’s long-term attractiveness as a place to live and work.
Please reject S.8418/A.10520.
Andrew S. Rein
Citizens Budget Commission