The Big Apple could go broke form the Virus economic hurt….

The coronavirus pandemic has plunged New York City into the most dire fiscal crisis it has faced in generations. More than 900,000 people have lost their jobs since February, and thousands of businesses have closed.

The streets remain empty of workers and visitors: Nearly 117,000 people filed new unemployment claims in the second week of May, a staggering 2,206 percent increase from the previous year. Tourism, which generates roughly $70 billion a year in economic activity, has disappeared.

The real estate market is stagnant; sales are projected to be down by a third. People are not spending money; sales tax revenue is expected to drop by $1 billion — part of an anticipated $9 billion shortfall in city tax revenue that could force drastic cuts to essential city services.

The grim outlook has forced top officials to contemplate a maneuver that has been disparaged ever since it brought New York to disrepair and the brink of bankruptcy in the 1970s: allowing the city to borrow billions of dollars to pay for its basic operating expenses.

Numerous fiscal experts and public officials, including Gov. Andrew M. Cuomo, are leery of giving the city permission to solve its budget problems by taking on significant debt, sensitive to the reckless borrowing that began more than 50 years ago under Mayor Robert F. Wagner and accelerated under the city’s next two mayors, John V. Lindsay and Abraham D. Beame.

The shortsighted economic strategy — Mr. Wagner blithely called it a “borrow now, repay later” philosophy — was one reason New York City reached the brink of bankruptcy in 1975, leading to the creation of the New York State Financial Control Board, which was given broad oversight of the city’s financial management.

Mayor Bill de Blasio, who has asked legislative leaders to grant him permission to issue bonds to cover the city’s operating costs, has said he would only do so as a “last resort.”

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“What do you do if you don’t have the option of some amount of borrowing? You have to do massive cuts, massive cuts to all city agencies,” Mr. de Blasio said on Thursday. “That will undermine any possibility of the right kind of restart and recovery. So, borrowing the right way, it makes sense.”

The city is far from alone in confronting an economic collapse. New York State is expecting as much as $13 billion less in tax revenue this year; California faces a $54 billion budget deficit, and Los Angeles has a 24 percent unemployment rate. Nine states, including New York and California, have borrowed from the federal government to reinforce their unemployment insurance trust funds…..

More….

New Jersey is in the same place as NYC and New York….

“New Jersey may have to cut half the state’s 400,000 public employees if the federal government doesn’t help make up a $10.1 billion revenue shortage through June 2021,” Bloomberg reports.

Said Gov. Phil Murphy (D): “I don’t think there’s any amount of cuts or any amount of taxes that begins to fill the hole.”

Politicalwire…

image…Mayor Bill de Blasio said that his $89.3 billion executive budget had already included $2.7 billion in cuts, and that more may be needed.Credit…Frank Franklin Ii/Associated Press