New York City could be headed for bankruptcy, financial analysts warn
{{#rendered}} {{/rendered}}New York City could be headed for bankruptcy. (iStock)
New York City could be headed for bankruptcy, according to financial analysts who see warning signs of fiscal disaster.
However, the city is doing all it can to ensure that doesn’t happen.
Raul A. Contreras, spokesperson for the mayor’s office, told Fox News via email: “The city’s credit rating increased in February for the first time since 2010, putting us on par with the State — something few municipalities ever accomplish. This mayor has been a strong steward of the city’s finances, including mandating cuts across city agencies in the next budget while still providing for New Yorkers.”
{{#rendered}} {{/rendered}}Economists, however, see potential dire signs.
“The city is running a deficit and could be in a real difficult spot if we had a recession, or a further flight of individuals because of tax reform,” Milton Ezrati, chief economist of Vested, a financial communication agency, told the New York Post. “New York is already in a difficult financial spot, but it would be in an impossible situation if we had any kind of setback.”
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{{#rendered}} {{/rendered}}The Post reported that long-term debt is now more than $81,100 per household in New York City.
Democratic Mayor Bill de Blasio wants to add $3 billion more in the new budget to the current $89.2 billion.
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{{#rendered}} {{/rendered}}De Blasio has detailed $750 million in savings for the preliminary fiscal 2020 budget, while Gov. Andrew Cuomo’s preliminary budget has $600 million in city cuts in the coming year, the news outlet reported.
“New York City could go bankrupt, absolutely,” said Peter C. Earle, an economist at the American Institute for Economic Research. “In that case, the city would get temporary protection from its creditors, but it would be very difficult for the city to take on new debt.”