NYC could get $3.4 billion in fed aid

While the Mayor and City Council prepare for perhaps their most difficult budget negotiations in recent memory because of the troublesome economy, the city may get a shot in the arm thanks to a federal stimulus plan that would provide $3.4 billion in relief over the next two years.
The package, which U.S. Senator Chuck Schumer, Congressmember Charlie Rangel and Mayor Michael Bloomberg announced on Sunday, January 25, would save the city about $1.8 billion in Medicaid payments and provide an additional $1.6 billion in education aid.
New York City’s $3.4 billion is part of President Barack Obama’s American Recovery and Reinvestment Plan that would infuse $825 billion into resuscitating the economy. New York City’s slice of the package could include $1.8 billion in Medicaid savings and at least $1.6 billion in education aid, officials said on Sunday night.
“The stimulus package is a silver lining in the dark economic cloud looming over our city and the Metropolitan area, but it’s not a silver bullet,” Schumer said during the press conference.
The announcement about New York’s share of the federal package comes just days before Mayor Bloomberg is expected to announce his Executive Budget on Friday, January 30.
“Balancing this budget is going require some very tough decisions and some painful cuts,” Bloomberg said.
Bloomberg praised the two federal lawmakers for helping to earmark the additional funds to the city, and he said they would definitely be used to help offset this year’s projected budget gaps, which sources say could climb as high as $4 billion compared to the original $1.6 billion gap expected.
“It’s not going to solve all of our problems - not by a long shot,” Bloomberg said during the press conference. “It’s not going to eliminate all of the tough budget decisions we still have to make, but I will say it will go a long way towards avoiding some of the most drastic options we would otherwise be facing.”
Queens City Councilmember David Weprin, who chairs the Council’s Finance Committee, said the $3.4 billion would help make up for the nearly $3 billion in funds the city is expected to lose from the state over the next two years.
The American Recovery and Reinvestment Plan, which federal lawmakers are discussing now, would likely not see any approval until sometime next month according to Schumer.