New York’s moment of fiscal truth is nigh

While the economic damage of the coronavirus has been felt since the pandemic began months ago, its effect on the finances of city and state governments is only now taking shape.

The countdown to fiscal clarity begins on Aug. 31, when New York City is expected to notify more than 20,000 employees of impending layoffs that Mayor Bill de Blasio warns will go into effect one month later unless the state approves billions in new borrowing authority for the city, an idea that City Council Speaker Corey Johnson is now backing. Gov. Andrew Cuomo and state lawmakers, however, have yet to get behind the idea as they hold out hope for billions in new federal stimulus funding for state and local governments.

While that could theoretically happen within the next month, it is increasingly likely that the state will have to make do without federal aid as the presidential race heats up. After months of budgetary uncertainty, The Buffalo News reports that the window of opportunity is closing if state lawmakers want to prevent deep cuts to state and city governments by raising taxes or increasing borrowing authority.

“It’s true that everybody has been holding their breath until they turn blue to not cut the budget … or to do what we can to make Washington deliver like it needs to,” state Senate Finance Committee Chair Liz Krueger told The Buffalo News. “We’re getting closer and closer to the ‘everything blows up moment.’”