New York City Mayor Bill de Blasio announced additional furloughs for city employees on Wednesday. This latest round of furloughs affects over 9,000 managerial employees and is expected to save the city over $21 million as it faces staggering tax revenue losses.
“It’s a difficult [move] because it will affect real people and their lives,” said de Blasio at a press conference. “It will affect their families. And these are people who have been working nonstop for months trying to protect all of you and look out for the whole city.”
The week before, de Blasio had already announced five-day furloughs for 495 mayoral staffers – including himself.
Furloughs come as NYC asks the state and federal governments for aid
The new furloughs come after months of pleas from de Blasio for Congress to send aid and for Albany to authorize New York City to borrow funds to cover the city’s operating costs.
So far, Senate Republicans and even President Donald Trump have balked, as has New York Gov. Andrew Cuomo.
The summer saw the city make its first budget cut during the de Blasio administration. From a $93 billion budget in 2019, lawmakers passed a smaller $88 billion package.
The lower budget has already included several painful cuts to city agencies. The city’s Independent Budget Office, however, has projected $10 billion in tax revenue losses through 2021, which has prompted the mayor to say that he may have to lay off up to 22,000 workers.
Previously, de Blasio said that the layoffs could come as early as October 1. The mayor, however, backed off from that pronouncement in August amind ongoing talks with union leaders. (Related: New York Exodus: New Yorkers leaving in droves due to crime, overreaching coronavirus restrictions and high taxes.)
Unions fight cuts, but de Blasio warns more to come
For their part, the unions are still fighting possible cuts, according to Harry Nespoli, chair of the Municipal Labor Committee.
“They want to take more from the unions than what the unions can possibly give up,” he said in an interview with New York Daily News. “Once you turn around and you give something up, you never get it back.”
De Blasio, however, has framed the furloughs as due to the extraordinary circumstances that New York City has faced with the Wuhan coronavirus and emphasized that they weren’t something that would have happened in “normal times.”
“We have to keep taking actions to address this situation,” de Blasio explained. “None [of] them are pleasant. None of them are things we would want to do in normal times.”
“No one wants layoffs, but unfortunately they are very much still on the table if we can’t find a better alternative,” he added. “We have to look for any and all savings that we can find right now.”
New York could raise taxes on the rich to address revenue shortfall
One possible avenue that New York City, and even New York state, could consider to raise dwindling revenues is already being pursued in neighboring New Jersey.
Last week, New Jersey Gov. Phil Murphy announced a deal with lawmakers to hike taxes on the state’s wealthiest residents as part of a plan to provide relief to the middle class from the coronavirus crisis.
The levy, which is expected to be finalized next month, would boost the tax rate on those earning more than $1 million annually from 8.97 percent to 10.75 percent. Previously, only earners with an annual income exceeding $5 million were subject to the 10.75 percent rate.
In addition, the tax tweak would also create a rebate of up to $500 for families that earn less than $150,000 if they have a child. For single parents, on the other hand, the income threshold for the rebate would be $75,000.
The new tax rules have caught the attention of many other local governments, including New York City’s.
“I’ve never been jealous of Jersey before,” said New York Assemblywoman Yuh-Line Niou. “It goes to show something, and means we can’t use the excuse that people will go to Jersey if we raise taxes.”
According to the Fiscal Policy Institute, a labor-backed think tank, implementing a similar 10.75 percent rate on income over $1 million in New York state would generate an additional $5.28 billion a year.
New York Gov. Andrew Cuomo, however, is still resistant to the idea. After the New Jersey announcement, Cuomo’s budget director, Rober Mujica, said that most of New York’s top earners live and work in New York City, where the top combined city and state income tax rate is already 12.6 percent. Mujica has frequently stated that the highest-earning 2 percent of New York tax filers account for a majority of income tax receipts.
“There is much discussion about the state and nation’s economic condition and the options available to New York state,” Mujica said. “Let’s make sure the discussions are informed.”
New York Republicans, on the other hand, said that the state should first look to reduce spending before increasing taxes.
For more on how the economic fallout coronavirus is making city and state government desperate for money, follow Pandemic.news.
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