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WHAT DOES A BIDEN WIN MEAN FOR NY’S TROUBLED ECONOMY?

More than 300,000 New Yorkers have reportedly left the city, further sending the state’s economy into a frightening freefall. How will we bridge the budget gap? Greg David, Fiscal and Economics reporter at The City discusses the dire financial future that awaits us in 2021 and whether federal aid can fill the state’s $8 billion hole.

AIRED: November 17, 2020 | 0:12:32
ABOUT THE PROGRAM
TRANSCRIPT

>>> GOOD EVENING AND WELCOME TO

"METROFOCUS."

I'M RAFAEL PI ROMAN.

MANY OF NEW YORK'S TOP OFFICIALS

WERE BANKING ON A JOE BIDEN

VICTORY TO SAVE THE CITY AND THE

STATE FOR THEIR CURRENT AND

GROWING ECONOMIC PROBLEMS.

BUT JUST HOW BAD IS THE

SITUATION BROUGHT ON BY THE

CORONAVIRUS PANDEMIC?

HOW MUCH OF THIS CRISIS CAN BE

DEALT WITH BY THE STATE AND CITY

GOVERNMENTS?

AND JUST EXACTLY WHAT CAN A

BIDEN ADMINISTRATION DO TO BAIL

US OUT?

JOINING ME TO ANSWER THESE AND

OTHER QUESTIONS IS GREG DAVID, A

CONTRIBUTOR COVERING FISCAL AND

ECONOMIC ISSUES FOR "THE CITY,"

AN ONLINE NEWS OUTLET FOCUSING

ON THE CITY.

GREG, WELCOME BACK TO THE

PROGRAM.

>> THANK YOU FOR HAVING ME.

>> FIRST OF ALL, WHAT IS THE

GENERAL ECONOMIC SITUATION OF

NEW YORK RIGHT NOW?

>> IT'S BAD, AND IT'S BAD

BECAUSE NEW YORK HAS BEEN HIT

HARDER THAN MOST OTHER PLACES IN

THE COUNTRY.

THE NUMBERS ARE REALLY

STARTLING.

SINCE FEBRUARY WE LOST 700,000

JOBS.

YOU KNOW, THAT'S THE EXACT

NUMBER WE LOST IN THE GREAT DARK

PERIOD OF NEW YORK FROM 1969 TO

1977.

OUR UNEMPLOYMENT RATE IS ALMOST

TWICE THE NATION'S, AND EVEN

WITHIN NEW YORK STATE, NEW YORK

CITY IS DOING WORSE THAN THE

REST OF THE STATE.

THE FIVE COUNTIES IN THE STATE

THAT HAVE THE HIGHEST

UNEMPLOYMENT RATES ARE THE FIVE

BOROUGHS OF NEW YORK.

A MONTH AGO OUR UNEMPLOYMENT

RATE WAS 14.1%.

WE GET NORM NUMBER LATER IN THE

WEEK.

I DON'T THINK IT WILL BE VERY

MUCH BETTER.

>> SO WITHIN NEW YORK CITY, WHAT

ARE THE BUSINESSES AND WHAT ARE

THE BOROUGHS THAT ARE DOING THE

WORST ECONOMICALLY?

>> WELL, THE ONE THAT'S MOST

OBVIOUS, AND THAT IS ANYTHING

RELATED TO TOURISM.

YOU KNOW, THIS WAS THE GREAT

STRENGTH WE HAD BUILT IN THE

CITY, THIS ENORMOUS TOURISM

INDUSTRY.

330,000 JOBS, AND IT HELPED TO

DIVERSIFY OUR ECONOMY AWAY FROM

WALL STREET.

YOU KNOW, THE OTHER THING IS IT

REALLY PROVIDED A LOT OF JOBS

FOR PEOPLE WITHOUT GREAT SKILLS,

PEOPLE AT THE LOWER END OF THE

INCOME LEVEL.

WELL, IT'S BEEN DEVASTATED.

WE HAVE NEW CITIES FROM THE

TOURISM INDUSTRY, THEY DON'T

EXPECT A RECOVERY IN SEVERAL

YEARS.

THAT'S ONE MAJOR REASONS.

OBVIOUSLY, RESTAURANTS ARE

SUFFERING.

THEY'RE SUFFERING IN PART

BECAUSE OF THE TOURISM DECLINE.

THEY'RE SUFFERING IN PART

BECAUSE PEOPLE ARE WORRIED

EATING INSIDE ISN'T SAFE, AND,

FRANKLY, WE'RE NOT CLEAR THAT IT

IS.

RETAILING OBVIOUSLY SUFFERED.

IT SUFFERED BECAUSE OF THE

SHUTDOWN AND NOW IT'S SUFFERING

BECAUSE THE REST OF THE ECONOMY

AND THE CITY IS NOT IN GOOD

SHAPE.

AS FOR BOROUGHS, WELL, IT'S

ABOUT THE BRONX.

THE BRONX HAS A 20% UNEMPLOYMENT

RATE.

THAT'S GREAT DEPRESSION LEVELS.

I HAVE BEEN IN THE BRONX.

I HAVE WRITTEN STORIES ABOUT IT.

THERE'S TREMENDOUS FOOD I

SECURITY IN THE BRONX AND

THERE'S AN ENORMOUS HOUSING

CRISIS COMING BECAUSE PEOPLE

AREN'T PAYING THEIR RENT AND

WHEN THE EVICTION MORATORIUM IS

LIFTED, IT COULD BE A DISASTER.

>> WHAT ABOUT THE COMMERCIAL

REAL ESTATE MARKET, ESPECIALLY

IN MANHATTAN?

IT'S PRETTY EVIDENT THAT EVEN

AFTER THE PANDEMIC IS OVER, A

LOT OF EMPLOYEES ARE GOING TO

CONTINUE TO WORK FROM HOME.

WHAT'S GOING TO HAPPEN TO ALL OF

THIS COMMERCIAL SPACE IN NEW

YORK, AND WHAT'S GOING TO HAPPEN

TO THE PEOPLE WHO OWN THEM?

>> I'M NOT PREPARED TO SAY

PEOPLE WILL CONTINUE TO WORK

FROM HOME.

AND I'M NOT PREPARED TO SAY THAT

BECAUSE THE GREAT STORY OF NEW

YORK'S ENORMOUS ECONOMIC BOON OF

THE LAST 15 YEARS OR SO IT

BECAUSE PEOPLE WANTED TO WORK

TOGETHER.

THAT'S WHY WE BUILT THIS GREAT

TECH INDUSTRY IN NEW YORK.

THEY CAME TO NEW YORK BECAUSE

THEY WANTED TO BE IN A PHYSICAL

LOCATION WHERE THEIR BUSINESSES

WOULD THRIVE.

BUT IF YOU'RE RIGHT, THERE'S

GOING TO BE BIG TROUBLE.

WE HAVE 5 MILLION SQUARE FEET OF

OFFICE SPACE.

IF WE DON'T NEED IT, I DON'T

KNOW WHAT WILL HAPPEN TO IT.

OR THE FINANCE OF PEOPLE WHO

BUILT THOSE BUILDINGS, OR WHAT

WILL HAPPEN ON THE BUSINESSES

WHO THRIVE ON ALL OF THESE

PEOPLE COMING INTO THE CENTRAL

BUSINESS DISTRICT.

THE LONG-TERM CONSEQUENCES WOULD

BE ENORMOUS.

I'M JUST NOT PREPARED TO GO

THERE YET BECAUSE I DON'T THINK

WE KNOW EXACTLY WHAT'S GOING TO

HAPPEN.

>> SO TALK ABOUT THE FISCAL

SITUATION OF THE STATE AND THE

CITY, HOW RED ARE THE BUDGETS?

>> WELL, THAT'S AN INTERESTING

THING BECAUSE POLITICIANS, THE

GOVERNOR AND MAYOR IN

PARTICULAR, KEEP SAYING THEY'RE

DIRE.

AND YOU KNOW WHAT, THEY'RE NOT

QUITE SO DIRE.

ESPECIALLY WE'VE GOTTEN SOME

VERY NEW INFORMATION THAT WOULD

SUGGEST THAT.

NOW, PEOPLE KEEP TALKING ABOUT

THE REVENUE LOSS, THE AMOUNT OF

REVENUE THAT HAS DECLINED FROM

FEBRUARY FROM OUR EXPECTATIONS.

BUT THAT'S NOT WHAT WE SHOULD BE

TALKING ABOUT.

WE SHOULD BE TALKING ABOUT THE

FORECASTS THAT WERE MADE ONCE

THE PANDEMIC HIT.

AT THE STATE LEVEL, CUOMO CLAIMS

THERE'S AN $8 BILLION HOLE IN

THE CURRENT BUDGET.

WELL, HIS TAX PROJECTIONS

SUGGEST THAT TAX COLLECTIONS

WILL BE $4 BILLION MORE THAN HE

EXPECTS.

SO IT'S A $4 BILLION HOLE.

BY THE WAY, HE SQUIRRELED ENOUGH

MONEY AWAY TO HANDLE IT.

WE JUST FOUND OUT THIS WEEK THAT

THE CITY HAS COLLECTED MORE THAN

A BILLION DOLLARS, ABOUT A

BILLION DOLLARS MORE THAN IT

EXPECTED, WHICH MEANS THAT ITS

BUDGET, WHICH IS ACTUALLY

PRECARIOUSLY BALANCED, IS IN A

LITTLE BETTER SHAPE THAN WE

THOUGHT.

THAT'S NOT TO SAY WE DON'T NEED

FEDERAL AID, BECAUSE THE MTA IS

IN TERRIBLE SHAPE, BECAUSE NO

ONE'S RIDING THE MTA -- OR NOT

ENOUGH PEOPLE ARE RIDING THE

MTA, AND THAT'S A BIG PROBLEM.

WHAT'S INTERESTING IS THE

NEAR-TERM PROBLEM ISN'T GREAT

BUT THE LONG-TERM PROBLEM IS

SEVERE AND THAT'S BECAUSE WE'RE

GOING TO HAVE A VERY SLOW

ECONOMIC RECOVERY.

BECAUSE WE'RE GOING TO HAVE A

SLOW ECONOMIC RECOVERY, TAX

REVENUES ARE GOING TO FALTER.

SO LIGHTNING TERM WE HAVE A VERY

SERIOUS PROBLEM.

BUT THE IMMEDIATE PROBLEM IS NOT

AS BAD AS IT'S BEING PORTRAYED.

>> BUT LET'S LOOK AT THE

LONG-TERM PROBLEM THEN BEFORE WE

GET TO WHAT AN BIDEN

ADMINISTRATION CAN DO TO HELP ON

THAT, TELL US QUICKLY WHAT LOCAL

OFFICIALS, WHAT THE MAYOR AND

CITY COUNCIL AND ALBANY

LEGISLATURE AND GOVERNOR ARE

DOING AND PROPOSE TO DO TO

TACKLE THOSE PROBLEMS ON OUR

OWN.

>> LET'S TALK ABOUT THE MAYOR

FIRST.

REMEMBER, BILL de BLASIO, BILL

de BLASIO'S EXPANSION OF CITY

GOVERNMENT PUSHED THE NUMBER OF

CITY EMPLOYEES TO AN ALL-TIME

RECORD, WELL INTO THE 300,000s.

AND HE'S COMPLETELY RESISTANT TO

MAKING ANY CHANGES IN THAT

NUMBER.

AND EVERY FISCAL EXPERT I TALKED

TO SAYS FOR THE LONG TERM, WE

HAVE TO MAKE CITY GOVERNMENT

MORE EFFICIENT AND REDUCE THE

COST.

HE'S DONE ANOTHER THING, WHICH

IS REALLY TERRIBLE.

AND THAT IS HE SAID THE LABOR

UNIONS HAVE TO GIVE HIM A

BILLION DOLLARS IN CONCESSION.

SO WHAT YOU -- YOU COULD GET TWO

KINDS OF CONCESSIONS, YOU CAN

GET RECURRING CONCESSIONS THAT

REALLY LOWER THE COST, OR YOU

CAN GET ONE-YEAR DEALS AND HE'S

GOING FOR ONE-YEAR DEALS.

SO THE UNIONS HAVE AGREED NOT TO

TAKE MONEY THIS YEAR THAT

THEY'LL GET NEXT YEAR.

THIS IS FISCAL IRRESPONSIBILITY

AT THE HIGHEST LEVEL.

>> SO WHAT IS THE GOVERNOR

DOING?

>> THE GOVERNOR, THE GOVERNOR

KEEPS SAYING THAT HE'S GOT THIS

$8 BILLION HOLE.

HE'S WITHHOLDING 20% OF AID TO

LOCAL GOVERNMENTS, WITHHOLDING,

NOT CUTTING, WITHHOLDING.

BUT HE'S VERY CAREFULLY

ACCUMULATING CASH.

HE'S GOT RESERVES EARMARKED.

HE'S GOT THINGS HE WAS GOING TO

SPEND MONEY ON.

HE IS REDUCING STATE EMPLOYMENT

AND HE'S FROZEN WAGES AT THE

STATE.

SO HE'S TAKEN A LOT OF NEAR-TERM

E6R89S

EFFORTS THAT WILL REALLY HELP

THIS YEAR.

BUT IF REVENUES ARE GOING TO

DECLINE LONG TERM, THE STATE

BUDGET WOULD NEED TO BE PAIRED

AS WELL.

>> LET'S TALK ABOUT WHAT A BIDEN

ADMINISTRATION CAN DO TO HELP US

OUT.

WHAT COULD IT DO?

>> IT CAN HELP US BY GETTING US

FEDERAL AID.

LOOK, A BIDEN ADMINISTRATION AND

DEMOCRATIC SENATE WOULD HAVE

BEEN GREAT NEWS FOR NEW YORK,

AND I SAY THAT NOT FROM A

PARTISAN PROSPECTIVE BUT

ANALYTICAL PERSPECTIVE.

BOTH SIDE, IF IT WENT DEMOCRATIC

OR IT GOES DEMOCRATIC AFTER THE

GEORGIA RUNOFFS, WE WILL SEE

STABILITY AMOUNTS OF FEDERAL

AID.

ONE SET OF FEDERAL AID WILL GO

TO THE GOVERNMENTS, AND THAT

WILL HELP WITH THE FISCAL

PROBLEM.

BUT WE ALSO NEED AID FOR THE

UNEMPLOYED.

AT ONE POINT IF YOU'RE AN

UNEMPLOYED PERSON IN NEW YORK,

YOU GOT AN EXTRA $600 IN YOUR

CHECK AND THAT REALLY DID A LOT

TO SUPPORT THE CITY'S ECONOMY.

NOW YOU ONLY GET WHAT YOU GET

UNDER REGULAR UNEMPLOYMENT.

ANOTHER ALMOST A MILLION PEOPLE

IN NEW YORK STATE ARE GETTING

WHAT'S CALLED PANDEMIC

UNEMPLOYMENT INSURANCE, THE GIG

ECONOMY WORKERS, FREELANCERS.

THEY NEVER QUALIFIED FOR

UNEMPLOYMENT BEFORE.

THEY'RE NOW GETTING $600 A WEEK.

BUT THAT WILL END ON DECEMBER 31

IF CONGRESS DOESN'T ACT.

THE BEST GUESS AT THE MOMENT,

WE'LL GET SOME AID BUT NOT AS

MUCH AID AS IF THERE WERE A

DEMOCRATIC SENATE.

>> YEAH, WHAT HAPPENS IF WE

DON'T GET A DEMOCRATIC SENATE?

THE GOVERNOR, YOU KNOW, ONE OF

HIS PLANS IS TO GET HELP FROM

BIDEN, AND IF WE DON'T GET A

DEMOCRATIC SENATE, OUR HANDS,

OUR FATE IS TIED TO THE VOTERS

OF GEORGIA, I GUESS.

AND EVEN IF BIDEN BECOMES

PRESIDENT AS EVERYONE EXPECTS,

THAT'S STILL ONLY TWO MONTHS

AWAY.

WHAT ARE WE SEEING IN THE NEXT

FEW MONTHS?

>> THEN YOU HAVE TO READ MITCH

McCONNELL'S MIND.

I DON'T KNOW I QUALIFY TO DO

THAT, BUT MY GUESS, McCONNELL

WILL MAKE A DEAL.

THERE WILL BE SOME AID, JUST NOT

AS MUCH AID.

BUT THERE IS AN ALTERNATIVE IN

THAT HE ADOPTS A SCORCHED EARTH

POLICY, TRIES TO FRUSTRATE THE

BIDEN ADMINISTRATION AT

ENVIREVERY

TURN.

THAT WOULD BE REALLY BAD NEWS.

I'M BETTING ON A DEAL.

>> BY THE WAY, DO YOU THINK

THERE WILL BE A REPEAL OF THE

CAP ON DEDUCTIONS FOR LOCAL AND

STATE TAXES THAT TRUMP PASSED

FOR THE TAX CUTS A COUPLE YEARS

AGO?

>> IF THERE'S A DEMOCRATIC

SENATE.

>> OKAY.

SO, YOU KNOW, WORD IS OUT --

WORD IS THAT THE VACCINES THAT

ARE ALMOST READY TO GO ARE OVER

90% EFFECTIVE AND THEY MAY BE

GOING INTO EFFECT NEXT MONTH.

IF THAT HAPPENS, IS THAT A GAME

CHANGER FOR US IN NEW YORK,

ASSUMING THAT PRESIDENT TRUMP

AND GOVERNOR CUOMO GET OVER

THEIR VACCINE FEUD?

>> WELL, THE VACCINE WILL COME

IN JANUARY ANYWAY, RIGHT?

YES, IT DEFINITELY IS A

GAME-CHANGER.

LOOK, I CAN'T WAIT TO GET BACK

TO MY OFFICE.

I'M PROHIBITED FROM GOING TO MY

OFTS, LITERALLY PROHIBITED.

TOURISM DEPENDS ON THAT VACCINE

AND THAT PEOPLE THINK IT'S

WORKING.

IT IS A GAME CHANGER.

IT HAS TO BE EFFECTIVE.

PEOPLE HAVE TO TAKE IT.

AND THEN WE'LL SEE WHETHER THERE

ARE LONG-TERM CHANGES IN THE

ECONOMY OR NOT.

THAT'S THE BIG QUESTION.

BUT WE NOW KNOW CLEARLY PEOPLE

AREN'T GOING BACK TO THE OFFICE

UNTIL THERE'S A VACCINE, UNTIL

THEY FEEL SAFE.

T

TOURISTS AREN'T COMING TO NEW

YORK UNTIL THEY FEEL SAFE.

JUST WATCH BROADWAY.

WHEN BROADWAY REOPENS, IF PEOPLE

ARE WILLING TO SIT THERE, THAT

WILL TELL US EVERYTHING.

TWO-THIRDS OF ALL TICKETS ON

BROADWAY ARE BOUGHT BY TOURISTS.

TOURISTS COME TO NEW YORK

BECAUSE OF BROADWAY.

IT WILL TELL US A LOT.

I HOPE IT'S A GAME-CHANGER

ANYWAY.

>> ALL RIGHT.

WE'VE GOT 15, 20 SECONDS.

IF THAT VACCINE DOESN'T HAPPEN,

AND IN FACT WE GET A HEAVIER

LOCKDOWN BECAUSE OF THE RISING

COVID CASES, WHAT WILL THAT DO

IN ABOUT 30 SECONDS?

>> I'M GOING TO RUN A STORY

ABOUT THAT NEXT WEEK, AND IT'S

GOING TO BE BAD NEWS.

BAD NEWS.

THAT'S ALL YOU CAN SAY.

>> I USUALLY LIKE TO END ON GOOD

NEWS, AND THERE MAY BE GOOD

NEWS.

GREG, THANK YOU VERY MUCH FOR

JOINING US TODAY.

IT'S ALWAYS A PLEASURE TO TALK

TO YOU.

>> THANK YOU.