State’s Growing Budget Hole Threatens NYC Jobs and Aid as Congress Takes a Holiday

With Congress essentially gone until Labor Day and a dire fiscal update from Albany, Gov. Andrew Cuomo and Mayor Bill de Blasio are running out of time to deal with budget crises that just took another $1 billion hit.

In the short term, the state is withholding 20% of city aid and de Blasio says up to 22,000 municipal layoffs loom. In the long term, the city and state face extended problems from the pandemic-created recession that require permanent reductions in spending, fiscal experts say.

“Little to no progress is being made in closing the gaps,” said Maria Doulis, vice president of the Citizens Budget Commission. “Federal aid appears increasingly distant, and it will be harmful to wait too long to act. The governor should develop and make public a plan to close state budget gaps.”

The budget squeeze intensified when the Cuomo administration announced last Thursday that revenues had fallen $1 billion more than expected — mostly due to a decline in sales tax collections but also because of weakness in some business taxes as well as taxes and fees from motor vehicles. (The one piece of good news is that income tax collections, including 2019 payments deferred from April to July, had met projections.)