New York budget crisis takes de Blasio back to the ’70s - POLITICO

Democratic mayor wants to borrow big to dig city out of budget mess — just like it did four decades ago.

New York City Mayor Bill de Blasio is scrambling as the locked down, virus-ravaged city's shortfall surged $1.6 billion over the past month alone.

NEW YORK — In 1975, New York City’s budget was such a disaster it prompted the infamous tabloid headline “Ford to City: Drop dead,” with the White House closing the door on the city’s last hope for a federal lifeline.

Now, Mayor Bill de Blasio says the city, with a budget bigger than those of most states, may soon be back in a similar spot, and he’s looking back to the ’70s for a maneuver to stave off catastrophe.

De Blasio said he wants the option to borrow his way out of the hole — barring a multibillion-dollar coronavirus relief package from the Trump administration — a power so unusual, it was blocked after the 1970s crisis.

Scott Stringer, the Democratic city comptroller running to succeed de Blasio, estimated that borrowing to cover $7 billion in expenses now would cost the city nearly $11 billion over the next two decades.

“The city has not come close to what it needs to do to control spending to get its fiscal house in order,” Andrew Rein, head of the Citizens Budget Commission, said in an interview.

Instead, the mayor is hoping to get through this crisis without substantive budget cuts.

City officials said the mayor is concerned about the potential exodus of millionaires who keep the economic engines humming, and realizes some New Yorkers may not be able to afford current property tax bills, let alone higher ones.

He fought Bloomberg’s cuts when he was in the City Council, barely slashed anything after taking over City Hall in 2014 and has in fact increased the budget some $20 billion during his six years in office.

“We are now $9 billion in the hole between the current fiscal year and the one that begins July 1,” de Blasio said Wednesday.

De Blasio projected a $7.4 billion revenue shortfall when he released his revised $89.3 billion budget in April, largely due to a loss of personal income taxes as the job market faltered.

City officials attributed the additional $1.6 billion the mayor announced last week to the grim state New York finds itself in after two months under assault by Covid-19: Even lower sales and real estate taxes than budget officials initially forecast.

New York City had been borrowing money to stay afloat, then borrowing more to pay off prior loans.

“The city’s leading bankers, who had been its principal lenders, came to see the mayor and the governor and told them both that nobody would lend the city a nickel under any terms,” Eugene Keilin, who was general counsel for the budget office at the time, said in a recent panel discussion.

Meanwhile, City Hall is set to pay $1.5 billion in retroactive raises to part of its workforce come October, Gelinas said

But the mayor has never embraced budget cuts

“It involves going through carefully and squeezing out the cellulite that builds up in every department,” Alair Townsend, the budget director for former mayor Ed Koch, said in an interview