“Reinstating the stock transfer tax is unlikely to produce the revenues advocates project, impact unintended taxpayers, and may incentivize the securities industry to divest from New York State, which would have negative implications for the State’s financial plan and overall economy,” Friedfel said.

But Maria Doulis, vice president of the fiscal watchdog group Citizens Budget Commission, questions whether the incentives would produce real savings for the city. After studying such programs, CBC found that “they essentially provide a benefit to people who would have retired anyway,” she says, and increase pension costs, wiping out short-term savings.



“This is a really deep financial crisis and it’s really important for city and state leaders to confront it” and look at workforce reductions, Doulis says. But she thinks incentives would be costlier than other ways to trim the workforce. The commission also does not think layoffs will be necessary—Doulis believes the city could realize significant savings through “an aggressive attrition policy” that entails not replacing many of the people who leave their jobs voluntarily.

David Friedfel, director of State Studies at the Citizens Budget Commission, said if we were to assume that the state would get approximately the same share of relief as it did during the Great Recession, the state would still need to close about a $46 billion budget deficit over the next four years.



While many are proposing potential revenue raisers, Friedfel explains the state should also look at cost saving measures as well.



“It’s going back and pursuing more savings through Medicaid,” Friedfel pointed. “Someplace that the state had identified savings through the Medicaid Redesign Team and they didn’t implement all those savings, that’s one area. Better targeting of school aid… New York sends billions of dollars in school aid every year to wealthy districts that could fund a sound basic education with local resources, so that’s an area the state should look to, particularly if they’re going to be doing school aid cuts, to target it to those kinds of districts.”



Citizen Budget Commission is also proposing ideas such as selling state assets such as a closed prisons, golf courses, or ski mountains, as well as potentially delaying tax cuts set to go into effect in 2021.



“The state really needs to buckle down now, adopt a savings plans and it may need to look for different revenues in order to help balance the budget,” Freidfel explained. “And the state should do those things sooner rather than later, particularly when it comes to reducing spending. The faster they do it, the sooner they do it, it makes it easier going forward. And it makes so you don’t have really drastic cuts at the end of the year to balance the budget.”

But the article—and the countless other similar articles written around the country this summer—underlined another type of unsettling question, one that largely remains unexplored or, at least, taken as a fact of life that cannot be changed. As Maria Doulis of the nonpartisan Citizens Budget Commission in New York City perfectly summarized it in the piece: “What is worrisome is that the high-income earners, particularly those with more than $1 million, provide a substantial amount of resources to the New York City budget.”

“What we’ve learned,” Andrew Rein, president of the nonpartisan Citizens Budget Commission, said after the city released revised revenue and spending estimates last week, “is that we’re actually still doing nothing about a fiscal crisis.”

Federal aid is necessary but is no panacea, according to Ana Champeny and David Friedfel, the directors of city and state studies, respectively, at the watchdog Citizens Budget Commission.

“[They] have budget gaps so wide and face risks so substantial that even with considerable additional federal aid, the state and city still will have to implement significant actions to stabilize their finances in the long run,” they said in a commentary.

“Saturday Night Live,” for example, has collected up to $15 million a year, according to the Citizens Budget Commission, a watchdog group, but is unlikely to ever leave its New York base. The comedy show occasionally shoots at Kaufman Astoria Studios.

The Citizens Budget Commission warned Tuesday that federal aid in and of itself won’t close the massive budget deficits faced by New York City and New York State.

The state and city “have budget gaps so wide and face risks so substantial that even with considerable additional federal aid the state and city still will have to implement significant actions to stabilize their finances in the long run,” the CBC reported.

Taken together, state and city budget gaps total $73.3 billion over four years. If federal aid ultimately relieves the same portion of these gaps as in the Great Recession, the state and city still will have to implement gap-closing actions totaling $57 billion.

“Federal aid may well be greater this time, but is unlikely to solve the whole problem,” according to the CBC. “State and city leaders should act with urgency to develop and implement credible fiscal stability plans.”

The mayor’s preliminary budget for next fiscal year must be submitted to the City Council in January. Will President-Elect Biden be able to deliver any more state and local aid than is possible in the current Congress? Not necessarily. And if making that determination takes until February, or even later, is Mayor de Blasio going to ‘hang on’ even longer without taking any steps to solve our fiscal problems? Delaying the start of gap-closing measures will only make the problem and the necessary solutions more painful.

Federal funding to assist the city and other jurisdictions that faced economic shutdowns because of the pandemic is unquestionably necessary and appropriate, but whatever amount is authorized — if any — will unlikely be sufficient to cover the full New York City deficit and will not last for more than one or two years. As Citizens Budget Commission President Andrew Rein has said, federal stimulus will only be a bridge to a more sustainable future; the City and State will face continuing budget gaps if the economy doesn’t fully recover by 2023. So, what’s the plan?

While the processes of negotiating public labor contracts has been in question in The Empire Center’s report, other organizations have been weighing in on how units of government should address labor relations at a time when budgetary challenges are becoming increasingly magnified amid COVID-19.

The Citizens Budget Commission, an organization describing itself as a fiscal watchdog group, released a report, Hard Choices that Can Balance New York City’s Budget, in June.

In it, author Ana Champeny addresses a number of recommendations on how local and state officials could address budget shortfalls in the years ahead.

Champeny’s policy brief calls on decision-makers to “make the right hard choices,” including reducing spending to mimic past recessions, shrinking the workforce through attrition and working with labor groups to improve productivity and modify benefits.

If the reforms were instituted alongside other measures, such as a temporary tax increase, Champeny said she believes New York City “can balance the budget without resorting to long-term borrowing, widespread layoffs, the most damaging service cuts or counterproductive tax increases.”

Previous fiscal bailouts demonstrate that New York’s city and state budgets will not be rescued by federal financial support, according to a new report from the Citizens Budget Commission.

“Federal aid will hopefully serve as a very valuable bridge to get us over the worst of these times,” said Andrew Rein, president of the nonpartisan fiscal watchdog group. “But the bridge has to land on a stable shore, a government we can afford on a recurring basis when the economy is expanding.”

The report looked back on the federal aid given to New York following the 2008–2009 Great Recession and concluded that while billions of dollars in federal relief is needed, it will not be enough to close the massive budget gaps the city and state face during the next four years.

Together, city and state budget holes total $73.3 billion over four years, according to the CBC. Even if federal aid ultimately relieves the same portion of the gaps as it did after the 2009 recession, New York still will have to implement $57 billion worth of budget fixes.

“Federal aid may well be greater this time but is unlikely to solve the whole problem,” the CBC concluded.

New York state and New York City are facing a combined budget of $73.3 billion over the next four years — and help from the federal government will not be enough to close that gap, according to a new Citizens Budget Commission report.

"New York State and City have budget gaps so wide and face risks so substantial that even with considerable additional federal aid the State and City still will have to implement significant actions to stabilize their finances in the long run," the report published Dec. 1 said. "If federal aid ultimately relieves the same portion of these gaps as in the 'Great Recession,' the State and City still will have to implement gap closing actions totaling $57 billion. Federal aid may well be greater this time, but is unlikely to solve the whole problem. State and City leaders should act with urgency to develop and implement credible fiscal stability plans."

The Citizens Budget Commission, a nonprofit, nonpartisan organization, said the most recent state financial plan projects a $60.1 billion, four-year deficit. That includes about $10 billion already provided by the federal government, including $4 billion in fiscal relief for enhanced Medicaid funding and education aid and $6 billion to support the coronavirus recovery.