Cuomo Eyes Construction, Manufacturing for Regional Reopen in New York
Governor Cuomo plans to reopen regions of the state in coordinated phases, starting with the construction and manufacturing industries.
During his daily briefing on Sunday, Cuomo teased an outline for the state’s economic restart plan as New York’s death and hospitalization rates continue to inch downward.
- Phase one will include opening construction and manufacturing functions with low risk.
- Phase two will open certain industries based on priority and risk level. Businesses considered “more essential” with inherent low risks of infection in the workplace and to customers will be prioritized, followed by other businesses considered “less essential” or those that present a higher risk of infection spread. As the infection rate declines, the pace of reopening businesses will be increased.
- The region must not open attractions or businesses that would draw a large number of visitors from outside the local area.
- There will be two weeks in between each phase to monitor the effects of the re-opening and ensure hospitalization and infection rates are not increasing.
- This plan will be implemented with multi-state coordination, especially in downstate New York. The plan will also coordinate the opening of transportation systems, parks, schools, beaches and businesses with special attention on summer activities for downstate, public housing and low-income communities, food banks and child care.
- The phased re-opening will also be based on individual business and industry plans that include new measures to protect employees and consumers, make the physical work space safer and implement processes that lower risk of infection in the business. The state is consulting with local leaders in each region and industry to formulate these plans.
The New York State Division of Budget (DOB) has released the FY 2021 Enacted State Budget Financial Plan
The State is proposing more than $10 billion in budget cuts. The cuts will be in the form of 10% cuts to agency appropriations, and over $8 billion in cuts to Aid to Localities (which includes funding for higher education, K-12 education, and local governments). The specific reductions proposed will be announced in the coming weeks.
“DOB is preparing a detailed plan itemizing the specific appropriations and disbursements that will be reduced or withheld. It expects to transmit the plan to both houses of the Legislature in May, when the Comptroller’s cash-basis report on April results is expected to be available. The Assembly and Senate will then have ten days to adopt, by concurrent resolution, their own plan to close the gap. If no legislative plan is adopted, or if the plan is not adequate to provide for a balanced budget, as determined by DOB, the plan prepared by DOB will take effect immediately.”
The DOB has also released a Preliminary Economic Impact Assessment by the Boston Consulting Group on the effects of the COVID-19 Pandemic on the State Economy.
The Enacted State Budget Financial Plan can be found here
The Preliminary Economic Impact Assessment can be found here.
Empire Center Analysis of the Key elements of the DOB forecast:
- Private sector employment in 2020 is expected to drop by 7.5 percent. Applied to the December 2019 total employment of 8.3 million, that would translate into a loss of about 630,000 jobs—or more than half of the state’s total private sector gain since 2010. In 2021, private employment in the state is expected to start growing again at a rate of 3.1 percent, which would translate into a recovery of 238,000 jobs.
- The S&P 500 stock index, an important indicator of likely change in state capital gains tax receipts, is expected to decline during 2020 by 14.7 percent. (That outlook, translating into very little change from last week’s stock market close, could actually turn out to be decidedly over-optimistic by a factor of three.)
Wages in the state are expected to decrease 7.2 percent during FY 2021, including a 50 percent drop in highly taxed securities industry bonuses, and personal income is projected to drop 2.2 percent in FY 2021 and 1.8 percent in FY 2022, despite a surge in “transfer payments” from the federal government to individuals.
- The unemployment rate is expected to rise from just above 4 percent before the crisis to a FY 2021 average of 11.4 percent, “a level higher than any recorded since the current methodology for calculating the rate was introduced.”
Mexico Announces Commitment to Re-Open Automotive Industry
Last night, the Government of Mexico issued this press release announcing a commitment to work closely with the U.S. and Canadian governments to “establish the criteria, guidelines, protocols and conditions that must be observed to move successfully towards the reopening of the productive activities of the automotive industry in North America.”
The press release adds that “this collaborative exercise will serve as a precedent to determine in Mexico the return of other non-essential economic activities.”
Banks Ready to Submit More PPP Loan Applications Today
The Paycheck Protection Program small business rescue will restart on Monday less than two weeks after its funds were exhausted, replenished with $320 billion in new money that President Donald Trump signed into law Friday.
The Small Business Administration will resume accepting applications at 10:30 a.m., the SBA and the Treasury Department said. The program, which offers loans that can be forgiven if businesses maintain their payroll, has been shut down since April 16, when an initial $350 billion was drained amid huge demand.
Meat Processing Plant Shutdowns Spreading
Bloomberg Reports that almost a third of U.S. pork capacity is down, the first big poultry plants closed on Friday and experts are warning that domestic shortages are just weeks away. Brazil, the world’s No. 1 shipper of chicken and beef, saw its first major closure. Key operations are also down in Canada.
While hundreds of plants in the Americas are still running, the staggering acceleration of supply disruptions is now raising questions over global shortfalls. Taken together, the U.S., Brazil and Canada account for about 65% of world meat trade.
A large number of workers, who also live and commute to work together and function and very close quarters on the factory floor have led to some plants becoming virus “hot spots.” Fear of the virus and supplemented unemployment benefits have also led to increased absenteeism among lower wage workers.
CDC: Why Forecasting COVID-19 Deaths in the US is Critical
Forecasts of deaths will help inform public health decision-making by projecting the likely impact in coming weeks. Forecasts based on the use of statistical or mathematical models (subsequently referred to as “models”) aim to predict changes in national- and state-level cumulative reported COVID-19 deaths for the next four weeks. Forecasting teams predict numbers of deaths using different types of data (e.g., COVID-19 data, demographic data, mobility data), methods (see below), and estimates for the impacts of interventions (e.g. social distancing, use of face coverings).