WHAT DOES A BIDEN WIN MEAN FOR NY’S TROUBLED ECONOMY?

> GOOD EVENING AND WELCOME TO 'METROFOCUS.'

I'M RAFAEL PI ROMAN.

MANY OF NEW YORK'S TOP OFFICIALS WERE BANKING ON A JOE BIDEN VICTORY TO SAVE THE CITY AND THE STATE FOR THEIR CURRENT AND GROWING ECONOMIC PROBLEMS.

BUT JUST HOW BAD IS THE SITUATION BROUGHT ON BY THE CORONAVIRUS PANDEMIC?

HOW MUCH OF THIS CRISIS CAN BE DEALT WITH BY THE STATE AND CITY GOVERNMENTS?

AND JUST EXACTLY WHAT CAN A BIDEN ADMINISTRATION DO TO BAIL US OUT?

JOINING ME TO ANSWER THESE AND OTHER QUESTIONS IS GREG DAVID, A CONTRIBUTOR COVERING FISCAL AND ECONOMIC ISSUES FOR 'THE CITY,' AN ONLINE NEWS OUTLET FOCUSING ON THE CITY.

GREG, WELCOME BACK TO THE PROGRAM.

THANK YOU FOR HAVING ME.

FIRST OF ALL, WHAT IS THE GENERAL ECONOMIC SITUATION OF NEW YORK RIGHT NOW?

IT'S BAD, AND IT'S BAD BECAUSE NEW YORK HAS BEEN HIT HARDER THAN MOST OTHER PLACES IN THE COUNTRY.

THE NUMBERS ARE REALLY STARTLING.

SINCE FEBRUARY WE LOST 700,000 JOBS.

YOU KNOW, THAT'S THE EXACT NUMBER WE LOST IN THE GREAT DARK PERIOD OF NEW YORK FROM 1969 TO 1977.

OUR UNEMPLOYMENT RATE IS ALMOST TWICE THE NATION'S, AND EVEN WITHIN NEW YORK STATE, NEW YORK CITY IS DOING WORSE THAN THE REST OF THE STATE.

THE FIVE COUNTIES IN THE STATE THAT HAVE THE HIGHEST UNEMPLOYMENT RATES ARE THE FIVE BOROUGHS OF NEW YORK.

A MONTH AGO OUR UNEMPLOYMENT RATE WAS 14.1%. WE GET NORM NUMBER LATER IN THE WEEK.

I DON'T THINK IT WILL BE VERY MUCH BETTER.

SO WITHIN NEW YORK CITY, WHAT ARE THE BUSINESSES AND WHAT ARE THE BOROUGHS THAT ARE DOING THE WORST ECONOMICALLY?

WELL, THE ONE THAT'S MOST OBVIOUS, AND THAT IS ANYTHING RELATED TO TOURISM.

YOU KNOW, THIS WAS THE GREAT STRENGTH WE HAD BUILT IN THE CITY, THIS ENORMOUS TOURISM INDUSTRY.

330,000 JOBS, AND IT HELPED TO DIVERSIFY OUR ECONOMY AWAY FROM WALL STREET.

YOU KNOW, THE OTHER THING IS IT REALLY PROVIDED A LOT OF JOBS FOR PEOPLE WITHOUT GREAT SKILLS, PEOPLE AT THE LOWER END OF THE INCOME LEVEL.

WELL, IT'S BEEN DEVASTATED.

WE HAVE NEW CITIES FROM THE TOURISM INDUSTRY, THEY DON'T EXPECT A RECOVERY IN SEVERAL YEARS.

THAT'S ONE MAJOR REASONS.

OBVIOUSLY, RESTAURANTS ARE SUFFERING.

THEY'RE SUFFERING IN PART BECAUSE OF THE TOURISM DECLINE.

THEY'RE SUFFERING IN PART BECAUSE PEOPLE ARE WORRIED EATING INSIDE ISN'T SAFE, AND, FRANKLY, WE'RE NOT CLEAR THAT IT IS.

RETAILING OBVIOUSLY SUFFERED.

IT SUFFERED BECAUSE OF THE SHUTDOWN AND NOW IT'S SUFFERING BECAUSE THE REST OF THE ECONOMY AND THE CITY IS NOT IN GOOD SHAPE.

AS FOR BOROUGHS, WELL, IT'S ABOUT THE BRONX.

THE BRONX HAS A 20% UNEMPLOYMENT RATE.

THAT'S GREAT DEPRESSION LEVELS.

I HAVE BEEN IN THE BRONX.

I HAVE WRITTEN STORIES ABOUT IT.

THERE'S TREMENDOUS FOOD I SECURITY IN THE BRONX AND THERE'S AN ENORMOUS HOUSING CRISIS COMING BECAUSE PEOPLE AREN'T PAYING THEIR RENT AND WHEN THE EVICTION MORATORIUM IS LIFTED, IT COULD BE A DISASTER.

WHAT ABOUT THE COMMERCIAL REAL ESTATE MARKET, ESPECIALLY IN MANHATTAN?

IT'S PRETTY EVIDENT THAT EVEN AFTER THE PANDEMIC IS OVER, A LOT OF EMPLOYEES ARE GOING TO CONTINUE TO WORK FROM HOME.

WHAT'S GOING TO HAPPEN TO ALL OF THIS COMMERCIAL SPACE IN NEW YORK, AND WHAT'S GOING TO HAPPEN TO THE PEOPLE WHO OWN THEM?

I'M NOT PREPARED TO SAY PEOPLE WILL CONTINUE TO WORK FROM HOME.

AND I'M NOT PREPARED TO SAY THAT BECAUSE THE GREAT STORY OF NEW YORK'S ENORMOUS ECONOMIC BOON OF THE LAST 15 YEARS OR SO IT BECAUSE PEOPLE WANTED TO WORK TOGETHER.

THAT'S WHY WE BUILT THIS GREAT TECH INDUSTRY IN NEW YORK.

THEY CAME TO NEW YORK BECAUSE THEY WANTED TO BE IN A PHYSICAL LOCATION WHERE THEIR BUSINESSES WOULD THRIVE.

BUT IF YOU'RE RIGHT, THERE'S GOING TO BE BIG TROUBLE.

WE HAVE 5 MILLION SQUARE FEET OF OFFICE SPACE.

IF WE DON'T NEED IT, I DON'T KNOW WHAT WILL HAPPEN TO IT.

OR THE FINANCE OF PEOPLE WHO BUILT THOSE BUILDINGS, OR WHAT WILL HAPPEN ON THE BUSINESSES WHO THRIVE ON ALL OF THESE PEOPLE COMING INTO THE CENTRAL BUSINESS DISTRICT.

THE LONG-TERM CONSEQUENCES WOULD BE ENORMOUS.

I'M JUST NOT PREPARED TO GO THERE YET BECAUSE I DON'T THINK WE KNOW EXACTLY WHAT'S GOING TO HAPPEN.

SO TALK ABOUT THE FISCAL SITUATION OF THE STATE AND THE CITY, HOW RED ARE THE BUDGETS?

WELL, THAT'S AN INTERESTING THING BECAUSE POLITICIANS, THE GOVERNOR AND MAYOR IN PARTICULAR, KEEP SAYING THEY'RE DIRE.

AND YOU KNOW WHAT, THEY'RE NOT QUITE SO DIRE.

ESPECIALLY WE'VE GOTTEN SOME VERY NEW INFORMATION THAT WOULD SUGGEST THAT.

NOW, PEOPLE KEEP TALKING ABOUT THE REVENUE LOSS, THE AMOUNT OF REVENUE THAT HAS DECLINED FROM FEBRUARY FROM OUR EXPECTATIONS.

BUT THAT'S NOT WHAT WE SHOULD BE TALKING ABOUT.

WE SHOULD BE TALKING ABOUT THE FORECASTS THAT WERE MADE ONCE THE PANDEMIC HIT.

AT THE STATE LEVEL, CUOMO CLAIMS THERE'S AN $8 BILLION HOLE IN THE CURRENT BUDGET.

WELL, HIS TAX PROJECTIONS SUGGEST THAT TAX COLLECTIONS WILL BE $4 BILLION MORE THAN HE EXPECTS.

SO IT'S A $4 BILLION HOLE.

BY THE WAY, HE SQUIRRELED ENOUGH MONEY AWAY TO HANDLE IT.

WE JUST FOUND OUT THIS WEEK THAT THE CITY HAS COLLECTED MORE THAN A BILLION DOLLARS, ABOUT A BILLION DOLLARS MORE THAN IT EXPECTED, WHICH MEANS THAT ITS BUDGET, WHICH IS ACTUALLY PRECARIOUSLY BALANCED, IS IN A LITTLE BETTER SHAPE THAN WE THOUGHT.

THAT'S NOT TO SAY WE DON'T NEED FEDERAL AID, BECAUSE THE MTA IS IN TERRIBLE SHAPE, BECAUSE NO ONE'S RIDING THE MTA -- OR NOT ENOUGH PEOPLE ARE RIDING THE MTA, AND THAT'S A BIG PROBLEM.

WHAT'S INTERESTING IS THE NEAR-TERM PROBLEM ISN'T GREAT BUT THE LONG-TERM PROBLEM IS SEVERE AND THAT'S BECAUSE WE'RE GOING TO HAVE A VERY SLOW ECONOMIC RECOVERY.

BECAUSE WE'RE GOING TO HAVE A SLOW ECONOMIC RECOVERY, TAX REVENUES ARE GOING TO FALTER.

SO LIGHTNING TERM WE HAVE A VERY SERIOUS PROBLEM.

BUT THE IMMEDIATE PROBLEM IS NOT AS BAD AS IT'S BEING PORTRAYED.

BUT LET'S LOOK AT THE LONG-TERM PROBLEM THEN BEFORE WE GET TO WHAT AN BIDEN ADMINISTRATION CAN DO TO HELP ON THAT, TELL US QUICKLY WHAT LOCAL OFFICIALS, WHAT THE MAYOR AND CITY COUNCIL AND ALBANY LEGISLATURE AND GOVERNOR ARE DOING AND PROPOSE TO DO TO TACKLE THOSE PROBLEMS ON OUR OWN.

LET'S TALK ABOUT THE MAYOR FIRST.

REMEMBER, BILL de BLASIO, BILL de BLASIO'S EXPANSION OF CITY GOVERNMENT PUSHED THE NUMBER OF CITY EMPLOYEES TO AN ALL-TIME RECORD, WELL INTO THE 300,000s.

AND HE'S COMPLETELY RESISTANT TO MAKING ANY CHANGES IN THAT NUMBER.

AND EVERY FISCAL EXPERT I TALKED TO SAYS FOR THE LONG TERM, WE HAVE TO MAKE CITY GOVERNMENT MORE EFFICIENT AND REDUCE THE COST.

HE'S DONE ANOTHER THING, WHICH IS REALLY TERRIBLE.

AND THAT IS HE SAID THE LABOR UNIONS HAVE TO GIVE HIM A BILLION DOLLARS IN CONCESSION.

SO WHAT YOU -- YOU COULD GET TWO KINDS OF CONCESSIONS, YOU CAN GET RECURRING CONCESSIONS THAT REALLY LOWER THE COST, OR YOU CAN GET ONE-YEAR DEALS AND HE'S GOING FOR ONE-YEAR DEALS.

SO THE UNIONS HAVE AGREED NOT TO TAKE MONEY THIS YEAR THAT THEY'LL GET NEXT YEAR.

THIS IS FISCAL IRRESPONSIBILITY AT THE HIGHEST LEVEL.

SO WHAT IS THE GOVERNOR DOING?

THE GOVERNOR, THE GOVERNOR KEEPS SAYING THAT HE'S GOT THIS $8 BILLION HOLE.

HE'S WITHHOLDING 20% OF AID TO LOCAL GOVERNMENTS, WITHHOLDING, NOT CUTTING, WITHHOLDING.

BUT HE'S VERY CAREFULLY ACCUMULATING CASH.

HE'S GOT RESERVES EARMARKED.

HE'S GOT THINGS HE WAS GOING TO SPEND MONEY ON.

HE IS REDUCING STATE EMPLOYMENT AND HE'S FROZEN WAGES AT THE STATE.

SO HE'S TAKEN A LOT OF NEAR-TERM E6R89S EFFORTS THAT WILL REALLY HELP THIS YEAR.

BUT IF REVENUES ARE GOING TO DECLINE LONG TERM, THE STATE BUDGET WOULD NEED TO BE PAIRED AS WELL.

LET'S TALK ABOUT WHAT A BIDEN ADMINISTRATION CAN DO TO HELP US OUT.

WHAT COULD IT DO?

IT CAN HELP US BY GETTING US FEDERAL AID.

LOOK, A BIDEN ADMINISTRATION AND DEMOCRATIC SENATE WOULD HAVE BEEN GREAT NEWS FOR NEW YORK, AND I SAY THAT NOT FROM A PARTISAN PROSPECTIVE BUT ANALYTICAL PERSPECTIVE.

BOTH SIDE, IF IT WENT DEMOCRATIC OR IT GOES DEMOCRATIC AFTER THE GEORGIA RUNOFFS, WE WILL SEE STABILITY AMOUNTS OF FEDERAL AID.

ONE SET OF FEDERAL AID WILL GO TO THE GOVERNMENTS, AND THAT WILL HELP WITH THE FISCAL PROBLEM.

BUT WE ALSO NEED AID FOR THE UNEMPLOYED.

AT ONE POINT IF YOU'RE AN UNEMPLOYED PERSON IN NEW YORK, YOU GOT AN EXTRA $600 IN YOUR CHECK AND THAT REALLY DID A LOT TO SUPPORT THE CITY'S ECONOMY.

NOW YOU ONLY GET WHAT YOU GET UNDER REGULAR UNEMPLOYMENT.

ANOTHER ALMOST A MILLION PEOPLE IN NEW YORK STATE ARE GETTING WHAT'S CALLED PANDEMIC UNEMPLOYMENT INSURANCE, THE GIG ECONOMY WORKERS, FREELANCERS.

THEY NEVER QUALIFIED FOR UNEMPLOYMENT BEFORE.

THEY'RE NOW GETTING $600 A WEEK.

BUT THAT WILL END ON DECEMBER 31 IF CONGRESS DOESN'T ACT.

THE BEST GUESS AT THE MOMENT, WE'LL GET SOME AID BUT NOT AS MUCH AID AS IF THERE WERE A DEMOCRATIC SENATE.

YEAH, WHAT HAPPENS IF WE DON'T GET A DEMOCRATIC SENATE?

THE GOVERNOR, YOU KNOW, ONE OF HIS PLANS IS TO GET HELP FROM BIDEN, AND IF WE DON'T GET A DEMOCRATIC SENATE, OUR HANDS, OUR FATE IS TIED TO THE VOTERS OF GEORGIA, I GUESS.

AND EVEN IF BIDEN BECOMES PRESIDENT AS EVERYONE EXPECTS, THAT'S STILL ONLY TWO MONTHS AWAY.

WHAT ARE WE SEEING IN THE NEXT FEW MONTHS?

THEN YOU HAVE TO READ MITCH McCONNELL'S MIND.

I DON'T KNOW I QUALIFY TO DO THAT, BUT MY GUESS, McCONNELL WILL MAKE A DEAL.

THERE WILL BE SOME AID, JUST NOT AS MUCH AID.

BUT THERE IS AN ALTERNATIVE IN THAT HE ADOPTS A SCORCHED EARTH POLICY, TRIES TO FRUSTRATE THE BIDEN ADMINISTRATION AT ENVIREVERY TURN.

THAT WOULD BE REALLY BAD NEWS.

I'M BETTING ON A DEAL.

BY THE WAY, DO YOU THINK THERE WILL BE A REPEAL OF THE CAP ON DEDUCTIONS FOR LOCAL AND STATE TAXES THAT TRUMP PASSED FOR THE TAX CUTS A COUPLE YEARS AGO?

IF THERE'S A DEMOCRATIC SENATE.

OKAY.

SO, YOU KNOW, WORD IS OUT -- WORD IS THAT THE VACCINES THAT ARE ALMOST READY TO GO ARE OVER 90% EFFECTIVE AND THEY MAY BE GOING INTO EFFECT NEXT MONTH.

IF THAT HAPPENS, IS THAT A GAME CHANGER FOR US IN NEW YORK, ASSUMING THAT PRESIDENT TRUMP AND GOVERNOR CUOMO GET OVER THEIR VACCINE FEUD?

WELL, THE VACCINE WILL COME IN JANUARY ANYWAY, RIGHT?

YES, IT DEFINITELY IS A GAME-CHANGER.

LOOK, I CAN'T WAIT TO GET BACK TO MY OFFICE.

I'M PROHIBITED FROM GOING TO MY OFTS, LITERALLY PROHIBITED.

TOURISM DEPENDS ON THAT VACCINE AND THAT PEOPLE THINK IT'S WORKING.

IT IS A GAME CHANGER.

IT HAS TO BE EFFECTIVE.

PEOPLE HAVE TO TAKE IT.

AND THEN WE'LL SEE WHETHER THERE ARE LONG-TERM CHANGES IN THE ECONOMY OR NOT.

THAT'S THE BIG QUESTION.

BUT WE NOW KNOW CLEARLY PEOPLE AREN'T GOING BACK TO THE OFFICE UNTIL THERE'S A VACCINE, UNTIL THEY FEEL SAFE.

T TOURISTS AREN'T COMING TO NEW YORK UNTIL THEY FEEL SAFE.

JUST WATCH BROADWAY.

WHEN BROADWAY REOPENS, IF PEOPLE ARE WILLING TO SIT THERE, THAT WILL TELL US EVERYTHING.

TWO-THIRDS OF ALL TICKETS ON BROADWAY ARE BOUGHT BY TOURISTS.

TOURISTS COME TO NEW YORK BECAUSE OF BROADWAY.

IT WILL TELL US A LOT.

I HOPE IT'S A GAME-CHANGER ANYWAY.

ALL RIGHT.

WE'VE GOT 15, 20 SECONDS.

IF THAT VACCINE DOESN'T HAPPEN, AND IN FACT WE GET A HEAVIER LOCKDOWN BECAUSE OF THE RISING COVID CASES, WHAT WILL THAT DO IN ABOUT 30 SECONDS?

I'M GOING TO RUN A STORY ABOUT THAT NEXT WEEK, AND IT'S GOING TO BE BAD NEWS.

BAD NEWS.

THAT'S ALL YOU CAN SAY.

I USUALLY LIKE TO END ON GOOD NEWS, AND THERE MAY BE GOOD NEWS.

GREG, THANK YOU VERY MUCH FOR JOINING US TODAY.

IT'S ALWAYS A PLEASURE TO TALK TO YOU.

THANK YOU.