New York City Council Speaker Corey Johnson on Thursday, March 19, 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.
NOTE: The above is from a March 18, 2020 press release issued by the New York City Council. To access it, click here.
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