The Big Apple is projected to lose a whopping $3.2 billion in tax revenues by October due to the coronavirus pandemic that is draining the local economy, City Comptroller Scott Stringer says.
Stringer’s analysis, which was released Monday, assumes the city’s entertainment, hotel, restaurant, travel and tourism sectors will continue to get walloped in projecting losses over the next six months.
His calculations take into account Mayor Bill de Blasio’s announcement late Sunday that the city’s nightlife will shut down and its restaurants and bars will only provide takeout or delivery service.
To ensure vital services for the city’s most vulnerable residents are unaffected, Stringer is calling on de Blasio to find $1.43 billion in potential savings before adopting a new budget for the fiscal year beginning in July.
Stringer said he believes this could be accomplished through a 4 percent cut at most city departments while sparing the social services agencies, Department of Health and NYC Health + Hospitals.
“As we brace for the economic fallout of the COVID19 pandemic, we must protect our children, our seniors, our small businesses, and the arts and cultural organizations that are core to our economy and our identity as a city,” said Stringer.
“We’re facing the possibility of a prolonged recession — we need to reduce nonessential spending now if we’re going to weather the downturn ahead.”
“I’m urging the City to immediately instruct all city agencies to identify savings in their city tax levy funded budgets, with certain exceptions for vital public health and social services, to be included in the Mayor’s Executive Budget,” said Stringer.
“Whether we implement these saving measures should be determined by the evolving economic situation, but it is critical that agencies do the work of identifying savings now, before it is too late.”
Stringer said he based his calculations on various estimates:
- The hotel industry will only have a 20 percent occupancy rate through June before gradually recovering.
- Restaurant sales will be down 80 percent.
- Retail sales and real estate sales will be down 20 percent.
Stringer is also calling for the city to take other measures to ease New Yorkers, including deferring sales tax payments due March 20 for hotels, restaurants and small retail businesses, and immediately waive all small business fines and fees.
A de Blasio spokesperson said, “We are taking aggressive steps to slow the spread of the virus and mitigate the economic impact. The Administration is closely monitoring this rapidly evolving situation and will issue a quarterly budget update next month that includes a revised revenue forecast.”