The multi-pronged approach could be funded with “Relief Bonds”
New York, NY – Council Speaker Corey Johnson on Thursday proposed a $12 billion relief plan to help New York City businesses and workers impacted by the Coronavirus/COVID-19 pandemic. The multi-pronged proposal includes a temporary universal basic income for all New Yorkers, temporarily deferring fees and refunding business taxes, and up to $250,000 to cover fixed costs for impacted businesses. It also includes unemployment protections for those who have had their hours cut, gig economy and freelance workers.
Speaker Johnson is calling for the plan to be paid for by the federal government. If the federal government fails to step up, it can be funded by bonds. New York City has a history of selling bonds to rebuild its economy after a disaster, including after 9/11. It was the boost the city needed while we waited on federal aid to come through and was integral to our ability to immediately begin the cleanup and recovery.
Based on the Council’s estimates, over 500,000 workers and more than 40,000 businesses are in the industries hardest hit during the COVID-19 crisis. These businesses generated $40 billion in taxable sales last year.
“This is a crisis unlike any we’ve ever seen. However, the tools that have helped us in the past can be utilized again. The difficult steps we’ve taken to protect ourselves and others are necessary, including social distancing and mandatory closures, but they are devastating our businesses and workers in every corner of the city. The hospitality industry has been the most high-profile industry impacted, but gyms, performance venues, salons, retail shops and many other types of businesses are shuttering or close to it. This plan will provide relief not just for our economy, but also for the small businesses and workers that are the heart and soul of New York City,” said Speaker Corey Johnson.
“This is an incredibly difficult time for New York City. So many Coronavirus/COVID-19 impacted communities already lack strong protections – the freelancers, the gig economy workers, and the creative class. I also personally know so many non-profits who are struggling to survive. We must protect all workers, which is why I am proud to support this thoughtful proposal. It opens up benefits like unemployment to more categories of workers, and gives a UBI to help our economy get back up and running. We must act now. Everything we love about New York City is at stake. Thank you, Speaker Johnson for prioritizing all New Yorkers,” said Council Majority Leader Laurie Cumbo.
“We have a plan to bring relief to the hundreds of thousands of NYC workers who have been hit hard by COVID-19. By deferring fees without penalty, refunding business taxes, expanding the safety net and putting money into New Yorkers’ pockets, this plan will ensure that many who need help will receive it. At the same time, it will serve to stimulate our local economy. Our plan takes into account the fact that federal dollars may be slow in coming or may simply not be enough. Regardless of how the federal government acts, all New Yorkers should know that, under the leadership of Speaker Corey Johnson, the Council is stepping up for them in a big way,” said Council Member Daniel Dromm, Chair of the Council’s Finance Committee.
The city does not know the full economic extent of this pandemic, but we must start taking action now. The components of the plan are:
- Institute a temporary universal basic income (UBI). New York’s economy needs an immediate boost. Even if current federal proposals for immediate payments of $1,000 or $2,000 to Americans pans out, the impact of those dollars is far less in New York than almost every other city in the country. Under the Council’s proposal, every New York City resident would get money in their pocket – $550 for each adult and $275 for each child. This means we reach everyone and provide some much-needed stimulus.
- Provide extra help for impacted New Yorkers. Unemployment insurance is a critical safety net, but it doesn’t provide enough support and doesn’t cover enough workers. Right now, unemployment helps less than half the unemployed and provides people with less than half of what they need. To truly provide comprehensive coverage, we must temporarily expand eligibility for unemployment to freelancers, gig workers, and those who have had their hours reduced. This plan would also temporarily enhance benefits for everyone by 30%. To do so, we would also need to shore up New York’s unemployment insurance trust fund, which started the year with a balance of $2.6 billion. With this massive surge in workers applying for benefits and fewer businesses paying in, the fund won’t hold out long. Under this proposal, we can continue providing benefits without depleting the trust fund.
- Cover fixed costs for businesses. We need to make sure that impacted small businesses are able to survive until we’re back to normal. Businesses have certain bills that need to be paid whether or not they’re operating—rent, utilities, loan payments, insurance, and taxes. Getting cash in their hands during this crucial period is essential. To do this we must:
- Immediately defer sales and use taxes due in March, as well as the commercial rent tax and business taxes.
- Institute penalty-free deferment of the collection of City fees, such as sidewalk cafe fees and permit renewal fees. For many businesses, that will mean an instant influx of thousands of dollars.
- Build on the City’s small business loan program by expanding eligibility to reach more businesses and increasing the maximum loan amount to $250,000. These should be structured as zero-interest loans, but the City, with the help of the federal government, should be prepared to forgive some of this debt if it’s necessary to keep businesses afloat. All these programs must also be expedited to get money out the door as quickly as possible to help prevent permanent closures and save jobs.
Ideally, the federal government would step up and immediately fund each of these programs. But the City can’t wait on that.
After the 9/11 attacks, the city got to work rebuilding right away, which was financed by selling bonds. The State Legislature took action to allow the sale of new bonds by the New York City Transitional Finance Authority and they were on the market by early October.
If we act quickly, we can replicate the success of that program and invest in our shared recovery again. New Yorkers who are able can give back by buying these bonds. It will be a a great way to help the city and fellow New Yorkers during this crisis.
To issue these bonds, our city is going to need new revenue streams. We should ask the wealthiest corporations and people, those who are most able to weather this storm, to chip in a bit more. That could be in the form of a temporary payroll tax, a surcharge on high-end commercial property, or a small tax increase on personal income over $500,000 a year.
If we provide these benefits for six months, it will cost about $12 billion. We might come out of this crisis before then. But the longer we wait, the harder it will be to bring the City back to normal. The costs of failure here are incalculable. This is a defining moment. New York has faced many challenges, each different than the last. We have persevered by coming together and rallying around the common good. We will do the same here.
“This pandemic is first and foremost a health crisis, but it is also dealing a devastating and unprecedented economic blow to the people of this city. In a matter of just days, New York City workers have lost their jobs, businesses are in financial freefall, and freelancers are without income. And this trend is only going to accelerate. We have learned from past crises of this scope and magnitude, that only the government has the resources to cushion this blow. I applaud and support Speaker Johnson for proposing this bold plan of action. We need to move on it immediately,” said Council Member Mark Levine, Chair of the Council’s Committee on Health.
“We all know our hospitals are suffering and need any resources in responding to COVID-19. But regular New Yorkers are struggling as well under one of the greatest crises our City has even seen. We need to put money in people’s pockets right now, and this proposal would do just that for New Yorkers across the Five Boroughs, from the worker who has been laid off to the small business owners who’s seen their store close. Combined with expansions of unemployment insurance and coverage of fixed costs for business, we could help New York build back just as we did after 9/11,” said Council Member Carlina Rivera, Chair of the Council’s Committee on Hospitals.
“Thank you, Speaker Johnson, for this comprehensive proposal. This crisis is unprecedented, and we must begin the conversation now about how to begin rebuilding our economy and provide relief to workers. This does both,” said Council Member Stephen Levin, Chair of the Council’s General Welfare Committee.
“Small business are the backbone of our economy. They provide jobs, pay taxes and offer valuable services. As advised by officials, New Yorkers are doing what they can to stay safe. Unfortunately, this is also having a tremendous impact on local businesses. They are on life support. This much needed plan will go a long way towards giving them the immediate relief that they desperately need as they seek ways to survive this crisis,” said Council Member Mark Gjonaj, Chair of the Council’s Small Business Committee.
“New York City’s businesses need help in this time of crisis. Now is the time to sound the alarm as scores of establishments feel the hit of COVID-19, with solutions from tax relief to providing workers with a basic income. I support Speaker Johnson’s relief package that addresses the needs of our most impacted industries,” said Council Member Keith Powers, Chair of the Council’s Criminal Justice Committee.
“We must mobilize to get relief to the families, businesses, and communities that need our help. This $12 billion relief plan represents exactly the kind of mobilization our City must undertake to shore up New Yorkers hardest hit by COVID-19. We need to give greater peace of mind in this time of crisis. I stand ready to work with my colleagues to deliver the help New Yorkers urgently need,” said Council Member Robert Cornegy, Chair of the Council’s Housing and Buildings Committee.
“I applaud Speaker Johnson’s bold plan to address the economic crisis resulting from the Coronavirus outbreak. The plan will help people hardest hit and deliver desperately needed relief, saving small businesses, providing more assistance to those who’ve lost their jobs and providing a lifeline to our cultural organizations and artists. We need big and innovative plans which will lay the foundation for recovery even while in the midst of this crisis,” said Council Member Jimmy Van Bramer, Chair of the Council’s Cultural Affairs, Libraries, and International Intergroup Relations.
“As a nation we have seen an unprecedented attack on our way of life with the spread of the Coronavirus. In the White House we have a President that uses racist and derogatory language that further divides us during a time we need to come together. Despite the disappointing response from the White House, I applaud Speaker Johnson, Mayor de Blasio and Governor Cuomo for their leadership and for taking swift action to provide relief to New Yorkers during this time of uncertainty. Our small businesses and workers are the backbone of our city and they deserve our support. I believe this relief plan is a step in the right direction,” said Council Member Vanessa L. Gibson, Chair of the Council’s Subcommittee on Capital Budget.
“As the husband of a small business owner, I know the havoc that COVID-19 is wreaking on small businesses firsthand. It is urgent that we immediately step up to support these businesses with tangible, substantial financial assistance that will allow them to weather the storm and be fully ready to bounce back when this is all over. I support Speaker Corey Johnson’s Relief Plan wholeheartedly, because it’s not just about the small business owners, but also the thousands and thousands of workers that rely on small businesses to make ends meet. Small businesses are the economic and cultural lifeblood of our city. It is critical that we act quickly and boldly to save them,” said Council Member Justin Brannan, Chair of the Council’s Committee on Resiliency and Waterfronts.