“A lazy substitute for real work”
Politics | The nation’s debt crisis comes to New York City, and the mayor lets it in
by Kyle Ziemnick
Posted 9/17/20, 04:29 pm
New York City Mayor Bill de Blasio announced Wednesday that because of a budget deficit the coronavirus outbreak brought on, he would lay off himself and every employee in his office for an unpaid week later this fiscal year.
The move will save approximately $860,000. But the city’s projected deficit for the year stands at a devastating $9 billion, and the hole did not come just from responding to the virus.
A 2018 report by the city’s comptroller indicated the city owes nearly $200 billion to employee pension funds. Many cities struggle with pension-related costs, according to conservative think tank The Manhattan Institute: “Taxpayer-funded contributions to government pensions can make up one of the largest single elements in a local budget.”
New York City’s fiscal category containing pensions made up 24 percent of the total budget in fiscal year 2018, the New York City Council reported. Noah Weinrich, a spokesman for Heritage Action noted benefits for city employees will usually hang around: “Nobody wants to cut their own pension.”
Fiscal issues also plague New York state, which approved borrowing up to $11 billion in the middle of the pandemic despite having a balanced budget requirement like most U.S. states. Those regulations don’t stop states from going into debt to balance the budget—a majority of them are in the red. Pension deficits in state governments for fiscal year 2017 totaled more than $1 trillion, according to Pew Research. And the recent economic downturn has lowered tax revenues.
Oftentimes, local governments’ solutions to overspending make the federal problem worse. New York Gov. Andrew Cuomo and de Blasio, despite often disagreeing, have begged the federal government and President Donald Trump to send bailout money to help with their weakened economies.
De Blasio’s move to cut his own pay and that of his mayoral employees will have little statistical effect on his budget. And much like federal spending, unchecked state and local spending will pile up—especially during a pandemic.
“This is no time for empty gestures. As the Mayor well knows, cutting one-one hundredth of a percent of the city budget is meaningless in the context of a $4.2 billion budget deficit,” city Comptroller Scott Stringer said. “Furloughing City workers with little payoff instead of scrubbing the budget for real waste and inefficiency is emblematic of the mayor’s approach to budgeting: a lazy substitute for real work.”
Read more of The Stew Sign up for The Stew email