Mayor de Blasio slashed $1.3 billion from his proposed city budget due to a huge loss in expected tax revenue as coronavirus has shut down wide swaths of the economy.
He moved Tuesday to cancel this year’s summer employment program for youths, saving $124 million; delay the expansion of preschool — one of his top priorities in the pre-coronavirus era, saving $43 million; and do a hiring freeze, worth $106 million.
Some $230 million in savings were projected due to a literal slowdown of city functions while much of the Big Apple is shuttered during the outbreak. For instance, de Blasio is counting on $15 to $20 million in savings on heat and power while many city workers are telecommuting. The weather gods, which didn’t send a snowstorm this winter, saved the city a projected $52 million on cleanup work.
Projected budgets for the Health Department and other agencies on the front lines of the outbreak were untouched.
“In light of the COVID-19 pandemic and resulting revenue losses to the City, we must take significant action to preserve our ability to provide basic operations and continue to fund life-saving measures,” de Blasio spokeswoman Freddi Goldstein said in an email.
Earlier this year, the mayor proposed a $95.3 billion budget, crafted in the face of a state reduction in Medicaid funding for the city.
Since then, unemployment in the Big Apple and beyond has skyrocketed, with the city comptroller predicting up to $6 billion in tax revenue losses here.
De Blasio’s proposed cuts, over the course of two fiscal years, include a $273 million reduction in education spending; $252.4 million in cuts to health and social services programs; $281.6 million in savings on the public safety front, including reductions at a Brooklyn juvenile detention center; $24.4 million axed from transportation initiatives including some protected bike lanes; some $27 million in cuts to sanitation programs; and $18.1 million in reductions to park programs such as tree pruning.
The mayor is also counting on millions of dollars’ worth of “contract underspending” and $180 million in “federal and state reimbursements.”
“There is no good news at all when it comes to the topic of our budget,” de Blasio said last month as he announced $1.3 billion in cuts in the works.
“That number may have to grow in the near future as we continue to lose revenue and see massive new expenses because of this crisis.”
The mayor and City Council must finalize the budget by June 30 under state law. Council Speaker Corey Johnson’s office gave a noncommittal statement on de Blasio’s proposed cuts.
“The Council’s chief priority, as always, is doing what is right for this city. This will be our guiding principle throughout the difficult weeks and months ahead,” said Johnson spokeswoman Jennifer Fermino.
The mayor has compared the coronavirus crisis to the worst financial disaster of the 20th century, saying Tuesday, “the only comparison you can make … is the Great Depression, which scares me to death to even say that.”
Last month, economists surveyed by Reuters gave an 80% chance the U.S. economy would enter a recession, usually defined as two consecutive quarters of reduced growth, this year.
De Blasio’s budget revision “does not really rise to the level needed to be able to tackle the massive revenue shortfalls the city will be experiencing,” Maria Doulis of the nonprofit Citizens Budget Commission told the Daily News.
“It’s a really critical moment and more needs to be done to restrain spending and limit inefficiency than what’s in this PEG program,” she said, using the acronym for de Blasio’s Proposal to Eliminate the Gap in the budget.
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