Bloomberg Seeks $9.8 Billion Aid for NYC Sandy Storm Losses
New York City is seeking $9.8 billion in federal funds to repair infrastructure and recoup economic losses caused by Hurricane Sandy, Mayor Michael Bloomberg said.
Private insurance and Federal Emergency Management Agency reimbursements would pay only for $9.2 billion of the $19 billion in total public and private losses to the city from the superstorm, Bloomberg said in a letter to state Congress members. New York City’s request includes $5.7 billion in lost economic activity.
“This funding will be needed to address the significant local expenses that have been and will be incurred, including costs that are ineligible under FEMA such as hazard mitigation, long-term housing solutions, and shoreline restoration and protection,” the 70-year-old mayor said.
Sandy, the biggest Atlantic storm in history, pounded the most populous U.S. city on Oct. 29 with winds of as much as 100 miles (160 kilometers) an hour. The storm killed more than 40 people in the city’s five boroughs, left 10,000 homeless and flooded transit tunnels and underground utilities.
New York Governor Andrew Cuomo estimated the cost of the storm to the state at $33 billion. He said today he is seeking a special federal appropriation of about $41 billion, including the cash for the city, $4.8 billion for the Metropolitan Transportation Authority and $9 billion to help prevent flooding. New Jersey Governor Chris Christie pegged damage to the Garden State at $29.4 billion or more, while Connecticut Governor Dannel Malloy projected at least $360 million in damages.
Cuomo’s request today followed a meeting in Manhattan with the state’s congressional delegation, the 54-year-old governor said at a press briefing. Hurricane Katrina, the 2005 storm that killed 1,833 people in New Orleans and on the Gulf Coast, will remain the costliest to strike the U.S., with Sandy probably second, Cuomo said.
“Katrina, which is the obvious comparison, in many ways was not as impactful as Sandy,” Cuomo said. “Because of the density of New York, the number of people affected, and the number of properties affected, was much larger in Hurricane Sandy than Hurricane Katrina. That puts this entire conversation in focus.”
Hard to Bear
The federal government provided $146 billion to New Orleans and Gulf Coast communities after Katrina. That storm, along with Hurricane Rita less than a month later, destroyed or damaged 215,000 homes compared with 305,000 in New York from Sandy, Cuomo said. In New York, 265,000 businesses were damaged or destroyed by Sandy, compared with 18,500 by Rita and Katrina, he said.
“I understand the fiscal pressures Washington is under,” Cuomo said. “I know that the taxpayers of New York cannot shoulder this burden.”
Bloomberg said New York City will struggle to recover unless Congress speeds funds. Two weeks ago, the mayor outlined $555.2 million in cuts from the city’s current $69 billion budget to help close a $635 million deficit after an August court ruling stopped the city from selling taxi medallions.
New York City is facing a $1.15 billion deficit for fiscal 2014, beginning July 1, even after planning $1 billion in spending cuts. Efforts to recover from Hurricane Sandy won’t be affected, Bloomberg’s office said in an e-mail.
Many agencies are just now focusing on recovery, Bloomberg said. The city’s Department of Transportation needs $800 million for street reconstruction alone. Sandy cost city agencies $4.5 billion, the mayor said.
With investors seeking higher yields to offset the lowest tax-exempt interest rates in a generation, the cost of rebuilding after Sandy and the city’s budget gap haven’t affected prices of the city’s tax-free bonds.
The extra yield, or spread, over AAA rated municipal securities that investors demand to hold 10-year New York City general-obligation bonds narrowed to 0.54 percentage point on Nov. 23 from 0.67 percentage point the day of the storm, according to data compiled by Bloomberg. The debt is rated AA by Standard & Poor’s, third-best.
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