The coronavirus will blow a $5 billion to $6 billion hole in the city’s budget over the next 15 months as restaurants, hotels and the retail sector conduct massive layoffs and tax revenue to the city dries up, the city comptroller found.
The Comptroller, Scott M. Stringer, said the analysis is based on a relatively optimistic estimate that recovery efforts will begin to take hold around June. “The longer this goes on, the wider this deficit will be,” he said.
Mayor de Blasio ordered city agencies on Monday evening to cut $1.3 billion from their spending because of the worsening budget picture. No cuts will come from items linked to the city’s coronavirus response. “Outside of that area, every agency will be asked to help,” he said.
James Parrott, director of economic and fiscal policies at the Center for New York City Affairs at the New School, estimated that the city lost 750,000 jobs in the cultural, restaurant, retail, airline and other sectors, with lost wages of $1.5 billion to $2 billion per month.
The city does have a surplus in the fiscal year 2020 budget of about $2.7 billion, according to the comptroller’s office. The city also has about $4.7 billion in the retiree health fund that could serve as a rainy-day fund if necessary, the Independent Budget Office said.
Mr. Stringer said direct federal aid to the city will be crucial because it is a difficult time for the city to raise taxes or cut services.
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