Government revenues of all types — sales and income taxes, tolls, transit fares, casino levies, lotteries, you name it — are dropping further and faster than at any time in history, thanks to unprecedented emergency restrictions imposed to minimize the spread of the coronavirus.
But while the federal government can effectively print money to finance deficit spending on huge stimulus and bailout packages, our state and local budgets must be balanced.
It’s painfully obvious that all those budgets will have to be cut, and by a lot.
There’s an obvious place to start in New York: Freeze state and local government employee pay. The combined estimated savings for every level of government could at least be a down payment on the massive reductions that will be necessary in the year ahead — and probably for years to come.
Consider the backdrop:
Compared to pre-pandemic forecasts, tax receipts in the year ahead are expected to drop at least $7 billion for the state government, $3.2 billion for New York City and up to $1 billion for county governments.
Photo by Matt Wade via Flickr