New York is projecting a loss in state revenue of $13.3 billion due to the COVID-19 pandemic, Gov. Andrew Cuomo said Friday, which means spending on areas like schools, local governments, and hospitals could be cut in the coming weeks.
Cuomo said the state hasn’t made a decision on the extent of those cuts, but that it’s something they’re considering based on the projected revenue shortfall.
“We’re looking at that now, and we don’t have a decision now,” Cuomo said.
The power to cut state spending was given to Cuomo in early April by members of the state Legislature, who approved it in legislation that was part of the annual state budget. Cuomo, through the state Division of Budget, will be allowed to cut spending next month.
That’s based on the amount of revenue collected by the state through the end of April, one of three measuring periods the Division of Budget will be allowed to use this year to determine changes in state spending.
Cuomo’s said, in recent days, that state funding for schools could be cut by 20%, or as much as 50%, without an immediate relief package from the federal government.
But Congress, this week, approved another piece of legislation without significant funding commitments to state governments, including in New York, where the state has spent billions of dollars on its response to COVID-19. In other words, “we are broke,” Cuomo’s said.
The state’s projected drop in revenue doesn’t stop at the $13.3 billion, which is about 14% below what New York had expected to add to its coffers over the next year. Over the next four years, Cuomo said, the revenue gap could reach $61 billion.
“This economic tsunami hit and you shut down all the businesses, everybody stays home, they’re not getting a paycheck, they’re feeling economic anxiety — the consequence to the state is the revenue projections are way down,” Cuomo said.
Cuomo has called on members of Congress to send financial aid to state governments, namely New York, but federal lawmakers haven’t delivered, he said again Friday.
He returned to a target from Thursday: U.S. Senate Majority Leader Mitch McConnell, R-Kentucky, who suggested earlier this week that distressed states declare bankruptcy, rather than receive funding from the federal government. McConnell opposes the latter option.
“I think, as I said yesterday, it’s a really dumb idea,” Cuomo said.
Cuomo, during his daily press briefing, called McConnell’s bluff. He said New York would need Congress to pass a law allowing states to declare bankruptcy before it considered the option, which Cuomo has said he won’t do.
“I say pass a law allowing states to declare bankruptcy. I dare you,” Cuomo said. “And let the president sign that bill that says I give the states the legal ability to declare bankruptcy.”
“It’s your suggestion, Senator McConnell. Pass the law — I dare you,” Cuomo continued.
McConnell’s office couldn’t immediately be reached for comment Friday.
Another 422 people died from COVID-19 Thursday, the latest numbers from the state. The number of people in the hospital with COVID-19 decreased to 14,258 Thursday, and 118 fewer people were intubated.
The number of people who’ve tested positive for the disease in New York reached 271,590, an increase of 8,130 over the day before. A total of 1,514 people were discharged from the hospital Thursday.