Mayor Bill de Blasio expressed optimism Friday that Albany will give him the authority to borrow billions of dollars to help the cash-strapped city weather the economic fallout resulting from the coronavirus pandemic.
De Blasio, who has threatened to lay off 22,000 city government workers because of massive hole in the city’s finances, said negotiations have heated up with Gov. Andrew Cuomo and the state Legislature that would give him the green light to borrow upwards of $7 billion — generated by floating long-term bonds that would be paid off in 30 years.
Last month, the governor and lawmakers resisted de Blasio’s pitch as premature.
His urgent appeal also comes because President Trump and Congress have not approved a COVID-19 bailout plan for reeling state and local governments whose tax bases have been destroyed by the pandemic.
The mayor and the City Council are in talks to finalize a new budget by July 1.
“We’re still working on a borrowing plan with Albany, a lot of conversations are going on,” de Blasio said during a press briefing. “But we don’t have anything yet to tide us over…. We’ve had extensive conversations.”
He said the borrowing may not be necessary if the feds come to the rescue — but that hasn’t happened.
“We need the fallback,” the mayor said.
De Blasio said state lawmakers want assurances that the mayor and Council won’t boost property taxes if they give him the OK to take out the massive loan to help stabilize the city’s finances.
“There will not be a property rate tax increase,” the mayor said.
The mayor said the city’s faces a projected $9 billion loss in revenues over the next two years.
A powerful state senator confirmed that lawmakers are looking more favorably at the mayor’s request.
“There is a growing recognition that the city is between a rock and a hard place,” said Senate Finance Committee chairwoman Liz Krueger (D-Manhattan).
She noted that the Legislature gave Cuomo the authority to borrow up to $11 billion if needed to shore up the state’s shaky finances.
“The city and state are in a parallel situation,” she said.
But Krueger said it’s important that the city government provide a united front, with the City Council joining the mayor in requesting borrowing authority.
“That would give greater assurances to Albany that there is a broad political backing,” she said.
Council Speaker Corey Johnson (D-Manhattan) said on Thursday said he was open to a COVID-19 borrowing after expressing reservations last month.
“When I gave my position a month ago, I said I wasn’t open to borrowing $7 billion with no guardrails and no plan for where it goes,” Johnson said.
“I am open to a responsible borrowing plan if we are at the same time focusing on meaningful cuts to agencies. We can’t just borrow to avoid looking hard at our budget…. If we can get some borrowing to fill the gap I’m not opposed to that but that can’t be a replacement for the other hard work we need to do on identify agency savings.”
De Blasio thanked Johnson for backing a COVID-19 borrowing plan.
“We are all united in wanting to find a way to avert those layoffs,” he said.
But the mayor acknowledged some key issues have to be ironed out.
Cuomo wants a state financial control board to monitor the city’s loan and spending practices.
De Blasio said he’s open to state oversight — as long as it doesn’t micromanage or strip the mayor and Council’s ability to spend and “determine” the city’s budget.
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