Mayor Svante Myrick ’09 live streamed to Facebook Tuesday afternoon with a “grim update and a plan” on Ithaca’s new budgetary measures, which include furloughing roughly 87 city employees and placing a hiring freeze on positions previously slated to be filled.
The new plan aims to reduce the city’s operating budget by $5.4 million, but that figure does not come near the potential $13 million in projected revenue losses.
The furloughs — which Myrick described as “temporary emergency furloughs” — come from across all departments, but Greater Ithaca Activities Center and the Youth Bureau are being affected disproportionately.
Myrick said this decision is purely pragmatic, as youth summer programming is cancelled.
Other furloughs include two firefighters, who are still in training, the mayor’s administrative assistant and four administrative staff from the Ithaca Police Department. A hiring freeze has been placed on six of the eight vacant positions in the Ithaca Police Department.
Furloughed employees are being offered a modified health insurance plan, the Blue Cross Blue Shield platinum plan. Myrick encouraged all of city management to transfer their own insurance to this cheaper plan, and is doing so himself.
“The most optimistic projection we have will make this the worst budget deficit the city’s ever seen. The least optimistic side is catastrophic,” Myrick said. “This could mean 30 percent of our revenue is gone, [which] could require a 30 percent reduction in operations.”
Myrick blasted Congress for failing to include sufficient support for municipalities in their recent aid packages.
“At first we thought okay, surely they’ll figure out their error, they’ll figure out that if they don’t do this municipalities will go bankrupt, cities, states villages will be underwater, so surely it will come in the next round of funding,” Myrick said on the latest expansion to the CARES Act.
But in revisions to the package, ultimately nothing came through.
“There is a widening and widening gap that is appearing in our budget,” Myrick said. “We’ve known that for 6 weeks, but we assumed that help was on the way.”
Myrick said that Congress may cancel plans to return to session in the first week of May, but that even if they did meet, aid would still take another month to replenish municipalities’ dried-up coffers.
The mayor thanked Sen. Chuck Schumer (D-NY), along with other Democrats, for their work in pushing for aid to localities, and called out Sen. Mitch McConnell (R-KY) for blocking that aid in the bills.
Myrick also called on Congress to increase direct aid to individuals from the current rate — a one time $1200 check for those making less than $75 thousand per year — to $2 thousand per month to all Americans through the end of the pandemic.
Myrick stressed that the $13 million in losses can’t be compensated for through cuts in any one department.
“If you reduced the mayor’s salary to zero, took all the mayor’s staff, eliminated the attorney’s office, GIAC, clerk’s office, IT department, finance department, eliminated human resources … you aren’t even close to 13 million,” Myrick said. “There’s no one place where all of these savings could be found.”
New York municipalities make revenue through sales taxes and taxes, but because sales have slowed dramatically, the city’s typical source of income is substantially stilted. Myrick added that the city would have to increase property taxes by 53 percent to make up for the revenue loss. The current cap of the annual increase of property taxes is 2 percent.
Myrick called the current plan the “goldilocks option.” One option would have been to wait to take action, but Myrick said that he wanted to allow employees to collect unemployment, and avoid uncertainty about the security of their job. In addition, if Congress fails to increase support, waiting to take action might mean permanent layoffs, instead of temporary furloughs.
But the mayor also wanted to avoid premature “draconian cuts,” citing some remaining hope that Congress will contribute more aid to localities. In a shift of tone, McConnell signaled on Monday that he was now open to considering a bailout package for struggling local governments.
“Please please extend whatever kindness you can to city employees as we go through this extremely difficult transition,” Myrick said. “This is a gruesome time, people are counting on us, our constituents are counting on us, and there’s just no money coming in we’re facing an ungodly, huge budget deficit.”