NYC inching towards bankruptcy, economist warns
New York City is headed toward a serious financial crisis for the first time since declaring bankruptcy more than 40 years ago.
Tax burdened businesses and individuals are fleeing the state, and the city is also facing a crippling budget shortfall, economist Milton Ezrati said.
“The state arranged a bill pay alone for the city [in the 1970s] -- effectively cut the credit cards in half,” said Ezrati during an appearance on FOX Business’ “Mornings with Maria” on Thursday. “And it could happen again if and until we have a recession.”
However, Ezrati said low unemployment and a “relatively buoyant” market, are signs that the economy is running well despite inching towards a $4 billion budget deficit.
“This is the best of times for New York City,” he said. “Everything is right for the city.”
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Last month e-commerce giant Amazon canceled its plans to build a massive corporate campus in the Long Island City neighborhood of Queens, over intense opposition over its nearly $3 billion in tax incentives from the city and state. Amazon claimed that it would have created 25,000 high-paying jobs and invested tens of millions of dollars locally.
Gov. Andrew Cuomo and New York City Mayor Bill de Blasio supported the project, which they argued would rake in more tax revenue than what the government was planning to shell out in incentives in addition to being a boon to the economy.
And although Ezrati is unsure of what Mayor de Blasio may do, Cuomo’s “back is against the wall” in light of uncertainty and concerns over taxes.
However, in Ezrati’s opinion, Cuomo’s first move won’t be to lower taxes, rather he may try to cut spending.