State and local governments in New York need $59 billion in federal aid or across-the-board spending cuts are likely, Gov. Andrew Cuomo warned Monday in a letter backed by prominent labor leaders.
The letter warns "no combination" of state-based solutions like raising taxes and cutting spending can offset the need for federal aid as the economic fallout from the pandemic continues.
The top leaders of public employee unions representing state and local workers as well as teachers and health care workers signed onto the letter.
"Even if state and local governments cut expenses, increase taxes, and reduced services, the revenue shortfall would still be in the billions of dollars," the letter states. "Moreover, forcing state and local governments to take such actions would only further the pain and extend the period of time for the nation's economy to recover."
The letter comes as another coronavirus stimulus package Congress continues to stall with little sign of a breakthrough at this point. Direct federal aid to state governments has been one of the sticking points in the talks.
Cuts are expected for schools, hospitals as well as local governments. For now, New York has held back 20% of aid amid the uncertainty at the federal level.
"Virtually all economists agree that forcing state and local governments to lay off employees and reduce services will negatively impact the national recovery," the letter states. "We saw that with the last fiscal crisis in 2007-2009, and we know that it will play out again."
Talk of raising taxes on the rich has continued in Albany among state lawmakers, with leaders in both the state Senate and Assembly backing higher rates to generate more revenue. Cuomo has resisted calls to do so, saying any state tax hike wouldn't be a panacea. He instead supports higher taxes on the rich on the federal level.