Return of the MAC for New York State

Call for the Formation of the Empire State Assistance Commission

While everyone is talking about COVID-19 and actual infection rates, I decided to write about something else that a surprising few people are discussing on radio and broadcast news—stemming from the daily briefings of New York Governor, Andrew Cuomo, and New York Mayor, Bill De Blasio.

The flippant appreciation for ongoing federal government help, and the continuing stern and condescending daily requests for unrestricted funds for New York State and New York City is becoming untenable. I heard Andrew Cuomo say earlier today, “Since [New York State] didn’t have any revenues, the way we did the budget was…whatever we get from the federal government.” Now Governor Cuomo is heading to Washington to speak with the president. This sounds familiar.

There are continuing calls for a financial bailout of New York State and New York City, essentially asking for handouts from states like Texas (according to the CDC at the Johns Hopkins site, 19,000+ cases, 500 deaths), North Carolina (6,601 cases, 200 deaths), Iowa (2902 cases, 75 deaths), North Dakota (585 cases, 9 deaths), and Montana with 433 cases and 10 deaths. In fact, mayor De Blasio waxed historic earlier by asking Trump to answer the call to fund New York state and New York City, if, “the cat’s got [Trump’s] tongue?” A bit of advice-sometimes it’s better not to prod the president too eagerly for an answer you might not want to hear. Ask the press gaggle at the White House daily briefings about their incessant prodding.

For many days after the third tranche of government bailout on 27-MAR-2020 (CARES Act), including today, I have heard Governor Cuomo paying lip service to President Trump while requesting unrestricted 10 to 15 billion for New York State in coronavirus-related reimbursements and expenditures, and De Blasio requesting 6-10 billion for New York City in similarly unrestricted funds. All the while, states like Texas, North Carolina, Iowa, North Dakota, and Montana are preparing to re-open and restart more of their economies to varying degrees in the coming days.

So let’s delve into why Mayor De Blasio and Governor Cuomo are really asking.

As mentioned recently by a national radio host who grew up in Philadelphia, New York State’s Fiscal 2019 Budget was projected to have a 10- to 15-billion-dollar shortfall with the city having similar troubles. Further, this freight train was coming long before COVID-19 according to a New York Post article from November 2019. In the article from last fall, there were suggestions that Governor Cuomo was proposing making up some of this shortfall by “reducing payments to hospitals and nursing homes in the 2019 budget and [the 2020 Fiscal Year Budget]”. This is pretty deplorable, and HE MADE SIMILAR THREATS AGAIN TODAY (via PowerPoint) in his press briefing!

A light should be focused on the effects of these cuts, past, present and future. If cuts were implemented before the coronavirus entered the US, or at any time, for that matter. In fact, before I contemplated this post, I tried to find some correlation between deaths and some number. So I looked. What I found is there is a proportional relationship to the number of nursing home beds by county in New York and Long Island and the total number of COVID-19 related deaths in these same counties when viewed on the logarithmic sca

Figure 1. Log of Total Probable COVID-19 Deaths (per county) on the X axis v. Log of Nursing Home Beds (Y axis). Source is CDC at the Johns Hopkins site and Health.Data.NY.gov. Excel sheet referenced in the text.

Table 1. County reporting of Total Probable COVID-19 Deaths, Number of Nursing Home Beds and corresponding Logarithmic values. Source Health.Data.NY.gov and the CDC data at the Johns Hopkins Site. Excel sheet referenced in the text.

Sadly, what is found is a stunning trend in the counties very close to New York City, without going into causation. The counties in other parts of New York and New Jersey did not fit this trend, but I am looking into other trends where the nursing home bed numbers are available.

Whether these hospital and nursing home budgets were cut before COVID-19, whether PPE was available, and whether it was distributed can be answered by others, although there were repeated questions about the stunning number of nursing home deaths during today’s (and past) press conference by Governor Cuomo.

I would implore Congress and President Trump to review the 1975 events leading to the near bankruptcy of New York, and the discussion, commissions, and newspaper headlines therefrom. According to the 2015 New Yorker article and sources therein, the Municipal Assistance Corporation, or the “MAC…insisted on significant reforms, including a wage freeze, a subway fare hike, the closing of several public hospitals, charging tuition at the previously free City University, and tens of thousands of layoffs.” Perhaps some fiscal sanity in New York will also trickle up to the federal level and over to other states seeking federal government bailouts.

“Return of the MAC” should be seriously considered for New York State and New York City. Let’s call it the Empire State Assistance Commission...ESAC.

Considering New York State’s current challenges, President Ford’s October 1975 speech is even more applicable to today. While some states and “cities in America have faced these very same challenges…they are still financially healthy today. They have not been luckier than New York, they simply have been better managed. There’s an old saying, ‘the harder you try, the luckier you get,’ and I kind of like that definition of luck.” Ford continued about New York, “no city can expect to remain solvent if it allows its expenses to increase at 12% every year while its tax revenues are increasing at 4-5% per year.” In the current case, New York’s revenue has been slashed by the mass exodus of citizens fleeing the city and the state due to high taxation without commentary on budgetary restraints. Remember what Governor Cuomo said earlier (above).

President Trump should, like then President Ford, ask, “What is the solution to New York’s dilemma?” To answer this, I would suggest to the US Congress and the President that the answer is NOT to send unrestricted funds to New York State and New York City. Form ESAC, the Empire State Assistance Corporation, or similar, and come up with a responsible way (with restrictions) to help New York State and New York City with their budget shortfall, as well as other states throughout the nation.

Manage better, try harder to spend less, and as my 11th grade history teacher said as I slept through a history video…WAKE UP!

Photo by Chris Schippers from Pexels