Statement of Congresswoman Carolyn Maloney New York City Council Hearing on HR 5523 & S 3055

Oct 28, 2002
Press Release
We all know too well the effects and some of the costs that September 11th has had on our community and the work that has been and is being done to rebuild and make our City whole again is incredible.
Some of those costs can't be itemized, such as the loss of loved ones, friends and fellow workers yet some can be set in dollars, the costs of repairs and the costs to rebuild the subways or police overtime

We, the city and state have gotten a lot of help in this regard, individuals from around the country and the world dug into their pockets and donated billions to help victims and their families, insurance companies did not use their war exclusions on their policies and paid some estimates over billions in damages to companies and individuals in the New York region, and the Federal government has stepped forward and committed 16 billion dollars in appropriated funds and another five in tax credits to clean up the World Trade Center site, pay the normal costs under the Stafford Act and other expenses.

While many of us have had issues with the way some of those programs have operated - like the aid to our city schools and the individuals grant program no one can doubt the sincerity of the effort on the part of Congress.

But what has come from the Federal government and from private insurance and what the dollar and cents costs of 9/11 have been are two different columns that don't equal each other.
As the city comptroller has well demonstrated there is a huge difference between what has and will be coming in versus the costs of 9/11 to the city.

One of the largest items that has not yet been dealt with and that still needs to be addressed is the loss of tax revenues for the city and the state as a direct result of 9/11 happening here a few blocks
from this building.

In New York, we suffered a severe loss in tax revenues due to lost jobs, destroyed buildings, a reduction in visitors to our city, and from the plain fact that a good part of the heart of our city was shut down for weeks.

A June 16, 2002, report by the General Accounting Office (GAO) that I and my colleagues in the New York delegation asked for, found the estimates by the New York City and State budget offices for a 1.6 billion dollar tax revenue loss for the city and a 1.6 billion loss for New York State as a result of this attack happening here was "reasonably approximate.'''

The report also details the estimates for New York City and State of losses up to $5.6 billion for FY 2003, bringing the total tax revenue loss to $8.8 billion over the next two years.

We have all seen the reports that indicate that the city estimates its budget gap to be $5 billion to $6 billion next year and without official estimates of its gap, the state has at least a $5 billion and as much as $10 billion budget gap.

These are the largest budget deficits we have ever faced.
Larger, I think, in proportion to the fiscal crisis of the 70's.

It is important to note that with a slowing national economy, almost all areas are suffering from budget shortfalls. And certainly part of our budget gap is part of this nation trend.

However, billions of this shortfall is a direct result of the attacks of September 11th and directly a result of the fact that these attacks happened right down the street at the World Trade Center.

But for Osama bin Laden, New York would have this revenue and it unfair that New Yorkers are being made to suffer these gaps. We will be facing less police on the streets, more kids in the classroom, less hours for libraries, and bigger potholes.
That is why we need assistance for lost tax revenues from the Federal government.

There is precedent for this.

This is not some fanciful idea

In the past, when areas were suffering from substantial losses of tax revenues, as a direct result of a major disaster, the Federal government provided this assistance.

A program known as the Community Disaster Loan Program was used repeatedly, and while the scale is admittedly different this assistance was provided to communities experiencing, like ours, a substantial loss in tax revenues.

Since 1976 the Federal government has made sixty such loans for cities and towns in Florida,Pennsylvania, Michigan, West Virginia, Massachusetts, Illinois, among others. And of these loans, 42% of total disbursement has not required repayment

That is why at the request of the Bloomberg administration I along with Serrano, Rangel, Israel, Velazquez, among others and with Senators Clinton and Schumer in the senate introduced HR 5523 and Senate 3055, the Community Disaster Loan Equity Act of 2002.

HR 5523 and Senate 3055 builds upon precedent. This bill removes an arbitrary cap on recovering lost tax revenues imposed only 2 years ago and includes states as eligible entities. It also does not require repayment of this assistance in the event of a terrorist attack.

We did this recognizing precedent of the program, as stated a program that frequently canceled all or part of the loan in previous natural disasters.

The hole that the attacks 9/11 have created in our State and City's budget is too large to fill without making New Yorkers suffer more.

I am happy to report that since the introduction of the bill, and with the leadership of Chairman James Walsh of Central New York and the House Appropriations VA/HUD subcommittee Committee the City will $650 million in "unreimbursed expenses", and the State $330 for a total of $980 million in aid for New York using this bill as the vehicle

This a great first step and the City and State should certainly be given this assistance. However, we should not confuse lost tax revenue and unreimbursed
expenses
It is my hope that the Mayor and the Governor will work with the Congressional Delegation in requesting the lost tax revenues that we suffered as a result of 9/11.

The promised 20 billion in aid was supposed to be a floor not a ceiling and I think we need to start making the case that the city needs more help to recover.

In April I and my colleagues received from the NY federal reserve a report on the effect of 9/11 to the city and one of the most startling things they said at the time which still holds true is that because of 9/11 the city will lag behind the rest of the country even if there is an economic recovery.

Unless we get this help that predication will be come true.
This is help that is needed to pay for the essential services of our community. And I think the American people would agree that New York services for schools, libraries, police, even water and highways should not suffer because of Osama Bin Laden.