ALBANY — An economic assessment compiled on behalf of the Cuomo administration estimates it will take three years for New York to fully recover from the financial fallout of the coronavirus pandemic.
It will be the first quarter of 2023 before New York’s economy gets to where it was in January 2020, according to the report by the Boston Consulting Group. It said the economic “trough” would likely occur in May or June, with a rapid “pickup” over the last half of the year, followed by a grindingly slow recovery beginning in 2021.
Over the course of the recovery, New York could lose about 14% of its gross domestic product — a more severe decline than the 2008-09 recession triggered by the stock market meltdown.
“This impact is greater than 9/11 or the 2008 Great Recession, which caused an economic impact equivalent of 2% and 10%, respectively,” the assessment said.
The report was commissioned by Gov. Andrew M. Cuomo, who has loudly complained that Congress hasn’t provided enough help yet to New York, the state hardest hit by the pandemic.
The Democratic governor has threatened steep cuts to education and health care spending without additional federal aid and traveled to Washington to meet with President Donald Trump about the issue, as well as about coronavirus testing.
The economic assessment was released in tandem with a document called the state’s “Enacted Budget Financial Plan,” which forecasts the upcoming year based on the budget Cuomo and state legislators approved on April 3.
The financial plan echoed much of the top line information in the budget: State operations spending is projected at $95 billion, a $10 billion reduction from what Cuomo proposed in January. However, the overall size of the budget, including federal funds, hasn’t changed and is still set at $177 billion because the state is banking on Washington aid to make up for money New York doesn’t have.
By the end of New York’s fiscal year next March, the shortfall in state funds could grow from $10 billion to $13 billion under current trends, the plan states.
The plan didn’t outline where the administration would reduce spending to keep the state budget balanced. But that could come in May, under special emergency powers the Legislature granted Cuomo to change state spending even after the budget was approved. The governor could do so upon the next state cash flow report, which should arrive in mid-May.
Robert Mujica, Cuomo’s budget director, repeated the warning Saturday.
“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 a statement accompanying the financial plan.