From Councilmember Brad Lander <[email protected]>
Subject COVID-19: Budgeting during an an economic crisis
Date May 9, 2020 3:35 PM
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Dear John,

Amidst what are now officially the worst economic conditions of our lifetimes [[link removed]] (over 20 million US jobs were lost in April, the worst devastation since the Great Depression), the City Council started our hearings this week on the Mayor’s proposed Executive Budget.

The challenge is a daunting one. We estimate that the City’s revenue shortfall over the next year will be over $7 billion. We have some reserves, but nowhere near enough. Meanwhile, we must rapidly ramp up the testing, contract tracing, and quarantine program necessary to begin re-opening (much of the cost for this, at least, will be paid by FEMA), address the financial catastrophe facing millions of New Yorkers and devastating our small businesses, and provide a path forward for an economic recovery that is more equitable and sustainable than what came before. And we have to produce a balanced budget by June 30th.

So there will need to be substantial budget cuts, some of them painful ones. New York City is not allowed to run deficits like the federal government -- which is morally obligated to pass a much more ambitious federal relief and stimulus program. We are not allowed to raise revenue in a progressive way like the New York State government -- which should close the carried-interest loophole and adopt an ultra-millionaires tax to help avert some of the devastating cuts to education and health care.

But still, New York City is not helpless. We have real choices to make. Through the Great Depression, New York City helped to invent the New Deal, invest in public housing, mass transit and CUNY, and implement the WPA. After World War II, a series of public investments helped to ensure several decades of broadly shared growth and prosperity.

After more recent shocks, however, like the 1970s fiscal crisis and the great recession, too much of the recovery approach leaned toward austerity, diminished the social safety net, and transferred wealth upward (especially increasing price of real estate), contributing to the city’s affordability and inequality crises. So it matters how we respond.

To me, the principles for our FY21 budget, and our path to economic recovery are clear: Put public health first. Make sure sacrifice is fairly-shared. Address the long-standing inequities that this crisis has highlighted. Invest in the future of our city. To do this, we will need to use all of the tools in our toolbox. Here are four ideas I raised at the Executive Budget hearing:

Public Health Corps: In my email to you earlier this week, I outlined ideas for a NYC Public Health Corps, to do not only contact tracing, but also social distancing compliance, quarantine housing support, and assistance with emergency food and economic recovery. Most of the cost for this would be paid by FEMA. We were distressed to learn on Friday that Mayor de Blasio not only plans not only a narrower approach, but has stripped the Corps away from the New York City Department of Health & Mental Hygiene (one of the nation’s premiere public health departments), reportedly over ego clashes [[link removed]] as DOHMH pushed him to close schools & stores earlier, in a way that jeopardizes the program’s integrity and success. The Council will be holding a hearing on the topic in the coming days.

Don’t prioritize policing over education & youth services: I agree with the Mayor that dire budget straits mean we must impose a hiring freeze. But if it applies to teachers, counselors, and social workers, then it should apply to the NYPD as well. Intead, the Mayor proposes to hire 2,300 new police officers next year as usual, arguing that they are needed for social distancing enforcement. But it is clear from the data [[link removed]] and videos released this week that the overreliance on the NYPD to enforce social distancing is counterproductive and racially discriminatory. I genuinely appreciate the work the vast majority of our officers do, and the risks they take for us. But this is not the time to hire more. Right now, the NYPD is only slated for $16M in cuts (0.3% of their budget), the DOE for $470M (3.4%), and the Department of Youth & Community Development for $177M (a staggering 48%; a useful dashboard showing all the cuts proposed by the Mayor is here) [[link removed]] . Expanding the hiring freeze to the NYPD would save $200 million that we could use to stave off some of the devastating cuts to education and summer youth programming.

Meanwhile, for those cuts that must be made to the Department of Education, every effort must be made to cut central administrative functions and outside contractors, rather than individual school budgets for teachers, specialists, and counselors. Sign here to support funding for our schools [[link removed]] .

Adjust organics recycling for the long run: Our community was one of the first to adopt curbside composting, and we consistently have the highest rates of organic recycling. Unfortunately, the program has not been rolled out citywide in a cost-efficient way. While it should be saving us money, it costs us $21 million instead. So we are going to have to suspend it this year. But we must save and improve it for the longer-run. I’m joining Council Members Reynoso and Powers in calling for a much less expensive temporary system of community composting drop offs, and for committing to a cost-effective, citywide, mandatory curbside organics recycling program to begin after this crisis passes. We can’t let the COVID crisis make our city less resilient in the face of the climate crisis. Sign here to help save NYC compost [[link removed]] .

Make capital budget investments: I believe it is a mistake to borrow to cover operating expenses; that’s like taking out a loan to pay for your groceries. But it does make sense to borrow for long-term investments in affordable housing, infrastructure, economic development, and climate resiliency. We have room to borrow responsibly (debt service is about 12% of municipal revenue; fiscal experts advise that it not go about 15%), and interest rates are at historic lows. So I will be strongly opposing the Mayor’s proposal to cut the City’s affordable housing capital budget by $512 million, and the overall capital budget by over $2 billion. Capital spending is one of the few counter cyclical tools that we have: it creates jobs in the short term, restores confidence in the city, and invests in the long term infrastructure that we need to make our city more vibrant, equitable, and resilient.

There’s no escaping the fact that this budget is going to be a painful one, with cuts that have really painful impacts. Still, if we learn lessons from the past, and think with a mix of vision and practicality, we can shape a budget and an economic response to this crisis that saves lives, achieves short-term relief, and builds a more vibrant, equitable and sustainable city that thrives for decades to come.

City and State Updates

Latest impacts: As of yesterday, the number of positive cases in NYC is 176,086. We have lost 14,389 New Yorkers due to COVID-19, with another 5,313 deaths likely due to the disease. DOHMH continues to provide additional breakdowns of the available data. 

In a frightening turn, a 5-year-old died in NYC on Thursday from what appeared to be a rare syndrome linked to the coronavirus which doctors have labeled “pediatric multisystem inflammatory syndrome.” Gov. Cuomo said Friday that 73 children in the New York area had been reported to be afflicted with the illness, though mercifully others have not yet been fatal. Parents should seek immediate care if a child has prolonged fever (5+ days), severe abdominal pain, change in skin color, reduction in urine etc.

New York City is establishing a Test and Trace Corps to test New Yorkers for infection, trace all cases and contacts, and provide support and care. By May, the unit will house and deploy 1,000 public health foot soldiers to do this work, with 2,500 by June. NYC will utilize the Johns Hopkins University COVID-19/Contact Tracing Training, sponsored by Bloomberg Philanthropies. As noted above, I am very concerned that this Corps has been stripped from the NYC Department of Health and Mental Hygiene. The Council will be holding a hearing on the topic.

Antibody Testing: The City is launching a program next week to test 140,000 healthcare workers and first responders in hospitals, firehouses, police stations and correction facilities. In addition, antibody testing will be available for another 140,000 members of the public, in partnership with BioReference Labs. Antibody testing will be by appointment only, with priority for local communities, at one site in each borough (the Brooklyn site is in East New York). Complete this survey to schedule an appointment: Antibody Testing Appointment Survey.

Face Covering Distribution: The City is distributing 7.5 million free face coverings. Five million 3-ply non-medical masks and 2.5 million cloth face coverings will be given out at a variety of locations, including NYCHA, DOE Grab & Go sites, Parks, Mitchell-Lama buildings, grocery stores, and as part of social distancing enforcement. The map with distribution sites is available online: Face Coverings. My office also has masks to distribute; if you need them, or know a group that does, contact us at [email protected].

Extension of Eviction Moratorium: The State announced an extension of the eviction moratorium for some residential and commercial tenants facing COVID-related hardship for an additional 60 days through August 20. The order banned late payment fees for missed payments during moratorium and will allow renters facing hardship due to COVID-19 to use their security deposit to pay rent. We still need a longer-term, comprehensive solution to rent and mortgage relief.

Zoom is back: The Department of Education announced that teachers can once again use Zoom as a platform for DOE-approved video-conferencing. So many of you told me that Zoom interaction was the best part of remote learning for your kids, and I pushed very hard to have it restored. I’m so grateful, I’m even willing to pretend that it’s just because Zoom upgraded their privacy and security settings.

Public Engagement on 2021-22 School Admissions Policy: DOE announced that they are kicking-off a citywide family and community engagement series on 2021-2022 admissions policy. Next week, DOE will begin convening school communities, parents and student leaders, labor partners, elected officials, and community organizations in a variety of meetings to hear their perspectives and insights about admissions policy. Hearing from students, families and communities is key to shaping a 2021-2022 admissions policy that will serve all NYC students.

Finally, tomorrow is Mothers Day. It’s really worth the time to appreciate the love, support, and endless labor of our moms and partners (and it probably won’t surprise you to learn that this recognition is not my strongest suit, as my amazing mother Carole and brilliant and thoughtful wife Meg will confirm). But as with so much else, the pandemic has both revealed and amplified systemic sexism in parenting and housework [[link removed]] (as well as PPE [[link removed]] , healthcare workforce [[link removed]] and economic disparities [[link removed]] , domestic violence [[link removed]] , even interrupting in online meetings [[link removed]] ). So flowers and breakfast-in-bed tomorrow, yes. But also, while we’re stuck indoors, maybe some hard conversations about how to rebalance the scales, in the domestic labor in our own homes (here’s one useful tool [[link removed]] , I need some work on this as well), and far beyond.

Brad

456 Fifth Avenue, 3rd Floor
Brooklyn, NY 11215
718-499-1090
[email protected]

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