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New York Hopes Increased Borrowing Will Prevent Mass Layoffs

New York City has rescinded its threat to lay off 22,000 city workers as Mayor de Blasio works to find other funding sources to offset a $9 billion deficit. But some city workers worry that furloughs might happen anyway.

Mayor de Blasio on August 26, 2020.
Mayor de Blasio on August 26, 2020. (Shutterstock/lev radin)
(Shutterstock/lev radin)
New York City will delay laying off as many as 22,000 municipal workers to give labor unions more time to work on increasing the city’s long-term borrowing capacity. Previously, agencies were set to receive further details regarding the layoffs on Oct. 1, but now the mayor is evaluating the situation “every single day” as his administration hopes to encourage labor unions to develop cost-saving plans and garner more support from state lawmakers.

New York City expects to see a budget deficit in excess of $9 billion over the next two years because of the coronavirus pandemic, but Mayor de Blasio’s calls for help were receiving little support from state lawmakers and Gov. Andrew Cuomo. In June, de Blasio suggested that the city may have to furlough or lay off 7 percent of city workers.

It’s a massive, painful number,” de Blasio said. “It resembles the kind of things we had to do decades ago. But the job here is to try and avert if we can.”

And now it seems like they can. De Blasio has also lowered his borrowing request to $5 billion, dropping his previous appeal by $2 billion, and several agencies, such as the Municipal Labor Committee and the New York Conference of Mayors, seem to have given their support to the cause.

But some are not so sure of the de Blasio administration’s ability to properly get the financial support the city needs. Last month, Greg Floyd, president of a union within the Municipal Labor Committee, was worried that the labor unions are being forced into a situation that may still result in furloughs.  

The Municipal Labor Committee is only going along with it because he’s threatening layoffs,” he said. Floyd explained that the State Financial Control Board could still take over the city’s finances and alter the current labor union contracts. The Control Board was created 45 years ago and can legally acquire control of the city’s finances in extreme circumstances; increasing the long-term borrowing capacity could cause the board to take charge.

Floyd, and other union representatives, would like to see de Blasio seek other alternatives before jumping to increased borrowing.

One union source said, “The mayor asking the state for borrowing power as a first resort is like a family going to a loan shark first instead of cutting their Peloton subscription.”

The New York City Council’s Committee on Finance is set to vote on the long-term borrowing capabilities on Sept. 10.

Zoe is the web producer and a writer for Governing.
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