N.Y.C. Seeks Permission to Borrow Billions: Live Updates

N.Y.C. Seeks Permission to Borrow Billions: Live Updates

The virus is forcing N.Y.C. to consider borrowing billions.

The coronavirus pandemic has plunged New York City into a dire fiscal crisis and forced top officials to contemplate a maneuver that once brought New York to disrepair: letting the city borrow billions of dollars to cover basic operating expenses.

Numerous fiscal experts and public officials, including Gov. Andrew M. Cuomo, are leery of giving the city permission to take on significant debt, sensitive to the history of reckless borrowing that led the city to the brink of bankruptcy in 1975.

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

Doing so, however, has become a real possibility: Legislative leaders are discussing the issue with the governor’s office and city officials.

Mr. Cuomo said on Thursday that issuing bonds to pay for operating expenses was fiscally questionable.

“We don’t want to create a situation where the state or any local government borrows so much money that they can’t repay it, and then you have to start to cut service and now you’re in that vicious downward spiral,” he said. “New York City has been there before.”

Scott M. Stringer, the city comptroller, said that if the city borrowed $7 billion to cover current expenses, it could be on the hook for more than $500 million a year in debt payments for the next 20 years.

But the mayor said Wednesday that he could not make further budget reductions without leading the city to a “horrible place where we would be cutting back basic services, cutting back personnel, furloughs, layoffs, things we do not want to see.”

On Friday, Mr. de Blasio noted that the city had been allowed to borrow money with no strings attached after the 2001 terror attacks. He also pointed out that several weeks ago, state lawmakers gave Mr. Cuomo the ability to borrow up to $11 billion.

“I think it’s a matter of just decency and fairness,” the mayor said. “Everyone’s looking for the right way to get something done that everyone can feel good about, and I’m very confident, based on those conversations, we’ll get something done during the month of June.”

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