Cuomo: CDC testing changes ‘political propaganda’

Gov. Andrew Cuomo speaks during a coronavirus briefing in Manhattan on Aug. 3. Courtesy of Gov. Andrew Cuomo’s office

NEW YORK — No state budgetary decision can prevent an economic downturn, Gov. Andrew Cuomo said Monday, before asserting the federal government is liable for New York’s estimated two-year $50 billion deficit due to the coronavirus pandemic.

The governor, his top aides and lawmakers have weighed how to close the state’s widening multi-billion-dollar budget gap, or raise revenue and make cuts at the same time.

The looming statewide deficit stands at an estimated $50 billion over two years, with a $30 billion state shortfall, a $12 billion hole for the Metropolitan Transportation Authority and projected $9 billion in New York City.

“Our deficit is so large that whatever the state (does) would have a negative effect on the economy,” Gov. Cuomo said Monday during a conference call with reporters.

Officials anticipate broad 20% budget cuts as they negotiate revenue-raising measures, such as increasing taxes on millionaires and billionaires, or borrowing. The governor has repeatedly spoken out against long-term borrowing — especially in the current economic climate.

“Rule No. 1 on borrowing: Don’t borrow today that which you can’t pay for tomorrow,” Cuomo said on the subject Thursday. “Borrowing is always the easiest answer (and) it’s always the most dangerous. ... Long-term borrowing is a high-risk venture right now because what do you think is going to change in a year?”

Approving long-term borrowing for any state jurisdiction is reckless, the governor said, without a financial control board in place.

“...You’d have to do all of the above: Raise taxes and borrow. It’s an impossible number,” he added. “If we have to close this deficit without Washington, there’s not going to be any constructive way to do it. It will be tremendously negative if New York state was forced, unjustly, to do this.”

Cuomo is not in favor of increasing taxes on the state’s wealthy, as New York City already boasts the nation’s second-highest income tax at more than 12%.

“We would have to raise taxes, which will get you several billion depending on how you do it ... but you would have to raise revenue and cut and borrow,” the governor said. “That can’t be positive with the economy before you cut off your nose to spite your face.”

Representatives in the state Budget Division said they expected to release a spending reduction plan at the end of September, or before the start of the fourth quarter. No plan is released to date as officials wait on the Congressional stalemate to provide federal coronavirus aid to U.S. state and local governments.

“We have been very clear that while we are fighting for the federal assistance New Yorkers deserve, we are preparing for a failure of the federal government to act,” according to a statement from Freeman Klopott, spokesman for the state Budget Division. “The depth of permanent spending reductions, in the absence of federal funding, will be severe for schools, hospitals, police and fire departments, along with other services that support our most vulnerable New Yorkers, and it makes no sense to make those reductions permanent until there is clarity from Washington. ... In the meantime, we will continue to manage the state’s finances using the tools enacted by the state Legislature in a way that maintains a balanced budget while funding critical services.”

Budget officials reduced state spending by 4%, or $4 billion, by freezing hiring, new contracts and pay raises, according to Klopott, as well as withholding $2.5 billion in payments to help the state’s projected $30 billion pandemic-driven revenue loss over the next two years.

The state spent more than $2.2 billion battling COVID-19 in the first quarter. Representatives did not have an updated number as the third quarter draws to a close.

The federal government is legally responsible for the state’s financial troubles, Cuomo argued, caused by unexpected spending to combat COVID-19.

“We’re not liable for this — Washington is liable,” Cuomo said. “It was their negligence that caused our loss.

“I am not bargaining against myself and I am not giving up the first point of liability,” the governor said on the subject Thursday. “If we were not in this governmental structure, I would sue the federal government for gross negligence for causing the COVID ambush of New York, and I would win.”

The governor compared the nation’s coronavirus deaths and response to other developed countries around the globe, saying President Donald Trump has attempted to fool Americans with false advertising about his success.

“The president is a marketing man — he marketed himself as a successful businessman for many years,” Cuomo said. “He now markets himself as a successful, effective president. If you look at the specifics ... he’s a business failure. He’s one of the worst global country leaders on a national scale. Reality at one point catches up with perception and that’s what’s happening to the president.”

The United States reported the second greatest number of COVID-19 daily deaths on the globe with 737 confirmed virus-related fatalities Saturday, with India in the lead at 1,124 deaths in a 24-hour period. Italy, once the global epicenter of the disease last March, reported 17 deaths Saturday, while 34 people in the United Kingdom and 39 French citizens died from the virus.

Sweden reported zero COVID-19 fatalities for several days, and again Saturday.

“How do you justify that?” the governor asked. “All those other countries had it first. They had it worse than we had it. How do you justify it? That’s why the American people don’t trust this federal government on COVID.”

COVID-19 is on the rise in Israel, France, Spain and other countries in the European Union, and continues to surge in dozens of U.S. states including Wisconsin, Iowa, Utah and Missouri. The states reported coronavirus positivity rates Monday of 18.5%, 16.4%, 12.9% and 12.3%, respectively.

“We are the anomaly to what is going on across the country,” Cuomo said. “We should be sealed from the rest of the nation. We have to remain vigilant. We won’t be out of this until we are all out of this — it’s just a collective reality.”

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(4) comments

Rambo

If you have a $50 bil deficit and Covid only cost us $2 bil this year it is a very small part of the total problem. Very poor money management by the Gov and his lackey’s is the real reason for our financial problems.

Don’t keep blaming the Federal government for our problem in NYS. No bail out is in order. Reduce spending period.

Charlie McGrath

I've come up with a brand new idea that will save New York. It has taken me years of research and data analysis. Cutting services and reducing the number of public employees along with benefits is the answer. I know that no one has ever thought of this before so I thought I'd help. You're welcome.

Pitbull

If anybody is responsible for this, its Cuomo. He hasn't even considered the economy in his decision making.

rdsouth

I have no ideological opposition to an active government, provided it's democratic. The state can tax and spend to the extent it can get away with it effectively, and there's nothing wrong with that. But for best results the taxing and spending regime should be structured for flexibility, for ability to react to changing circumstances. While there's nothing wrong with the state taxing and spending, the flip side is that it is necessarily not entitled to do so and should plan for possible changes of circumstances the way households plan for possible disability or unemployment. Has the federal government been explicitly sworn to act as insurer?

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