Virus Outbreak State Budgets

FILE - In this Tuesday, March 24, 2020 file photo, Gov. Andrew Cuomo speaks during a news conference against a backdrop of medical supplies at the Jacob Javits Center that will house a temporary hospital in response to the COVID-19 outbreak in New York. Cuomo, a Democrat, ripped the GOP-led Senate's version of the coronavirus package as "terrible" for New York and said, based on preliminary reports, that it would send the state some $4 billion in direct aid. (AP Photo/John Minchillo)

ALBANY — The North Country, the Mohawk Valley and Central New York are expected to be among New York's first regions where limited business activity will resume in May, Gov. Andrew Cuomo said Sunday.

The first phase in restarting the economy since the shutdown began in March will be to allow construction and manufacturing activity to proceed, the governor said.

Subsequent phases of reopening businesses will hinge on how essential they are as well as infection risks and the companies' ability to implement safeguards to counter the spread of the COVID-19 virus, he said.

Decisions will be made on a "business by business" basis, based on risk and infection data, he added.

Cuomo noted the hospitality and restaurant industries, as well as retail stores, pose greater challenges in reopening planning. He offered no timetable for when those industries could resume normal activities. They are among the categories of "nonessential" businesses the state has ordered closed since mid-March.

The current statewide shutdown order expires May 15.

The latest New York COVID-19 data indicated the state had 367 new deaths from Saturday to Sunday, bringing New York's overall fatality total to 16,966. The daily death number was the lowest for the state in more than three weeks.

Meanwhile, the number of people being treated at hospitals for the virus fell to 12,839.

The vast majority of deaths have been in New York City, its northern suburbs and Long Island.

Reopening the downstate region will be "problematic," Cuomo suggested, suggesting that will likely be done in tandem with New Jersey and Connecticut to avoid people traveling from closed areas to ones that have opened. But he also acknowledged extending the shutdown would yield serious challenges as the weather turns warmer.

“You can't tell people in a dense urban environment, all through the summer months: 'We don't have anything for you to do, stay in your apartment with the three kids,'" he said. "That doesn't work. There's a sanity equation here."

Citing a decline in new infections and hospitalizations from the contagion, Cuomo said, "As long as we act prudently going forward, the worst should be over." He suggested business operators develop reopening plans that spell out how they will protect customers and workers through social distancing and the use of protective equipment.

Cuomo also pointed out infections are tapering off, with the latest data showing the typical individual who has the virus infects 0.8% of a person. The upstate infection rate is slightly higher, 0.9%, than the downstate rate, 0.75%. "If we keep the infection rate below one person infecting one person, that is where the infection rate continues to drop," he said.

Michael Elmendorf, president of the Associated General Contractors of New York, told CNHI that it "makes tremendous sense" for the state to let the construction industry resume its work on projects, using data tracking trends in infections.

"The reality is this situation is impacting different regions in vastly different ways across the state, and that argues in favor of ramping things up at a different speed depending on the prevalence of the infection in a region," Elmendorf said.

Many construction firms working on public projects have continued during the pandemic but those working on other jobs have had to curtail those operations, he noted.

Cuomo said while there are no formal plans for resuming professional baseball, there may be an opportunity to have teams rely on revenue from televising games, if it remains too risky to have fans in stadium seats

SCHOOL BUDGETS

New York's approximately 700 school districts need to put budgets in place by July 1. But uncertainty looms over how much state assistance will be flowing to them as the projected sums are expected to be impacted by a sharp downturn in state revenue.

Robert Mujica, Cuomo's budget director, acknowledged state funding cuts to schools could be as high a 20 percent. But he said the levels of funding will be influenced by upcoming congressional actions.

"Between now and May 15, we will have more clarity and more specificity in the financial plan," Mujica said.

Over the weekend, Mujica announced that state spending has to to be reduced by $10 billion from the level approved in the state budget earlier this month due to the abrupt drop in state revenues.

A new assessment of the state's fiscal condition, completed by the Boston Consulting Group at the state's request, found that the recession triggered by COVID-19 will be deeper and longer lasting than the economic downturn that hit the state treasury in 2008.

“Unlike the federal government`, New York State must balance its budget and in the absence of federal assistance, we will have to make deep cuts which could impact a broad range of services," Mujica said in response to that assessment. "New York reflects 8% of U.S. GDP, and without federal support our ability to help lead the nation to economic recovery will be weakened.”

The consulting firm predicted New York's economy won't fully recover until early 2023, with a "trough" in business activity expected in May or June.

   

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com.

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