Mayor Marty Walsh Sunday warned of a potential “prolonged recession” brought on by the economic ramifications of the coronavirus pandemic that have already forced his administration to cut $65 million out of a budget proposal for fiscal year 2021.
Walsh, speaking with WBZ’s Jon Keller, said the proposal before the City Council this week is a “strong, responsible budget,” with investments in areas such as housing and education.
Still, Walsh’s optimism for a quick, economic turnaround is waning.
Two or three months ago, he would have said the region could experience a V-shaped recovery, or essentially a quick downturn followed by a speedy turnaround, the mayor said.
But now, Walsh said he remains concerned about the potential for a second wave of cases, especially after watching other parts of the country log higher case counts after reopening.
In the meantime, local industries have already taken a heavy hit. Many restaurants in Boston have closed for good, and tourism — a major pull for the city’s economy — is nonexistent, he noted.
The health care industry also saw losses, according to Walsh, who highlighted that there are lingering questions about whether colleges and universities will attract the city’s large student population back to Boston this fall.
“I’m not as optimistic about a quick rebound and recovery,” he said.
If Massachusetts doesn’t see a V-shaped recovery, “this means we have a prolonged recession,” he said.
“If we have a prolonged recession, then that doesn’t just affect this fiscal year, it affects the next two and three down the road, where new investments will not happen and it’s very difficult and you can’t force it … So we have to be very cognizant and pay very much attention as we move forward here about how do we move forward here with caution,” Walsh told Keller.
Urging a “responsible” approach to the city budget, Walsh said there are many programs that will not be fully funded under his current plan, which does not, however, call for any layoffs or furloughs for city employees.
Meanwhile, the renewed budget review process comes amid the nationwide push to defund police departments by reallocating some of that money into anti-violence and public health programs.
A majority of the City Council last week asked the mayor for a 10 percent cut in police pay and to move over $300 million to social programs.
“There’s been lots of requests in the last three weeks about putting money into different programming,” Walsh said Sunday. “I’d love to do that, but unfortunately in some cases right now, we can’t do that. But it’s something that as the year goes on and we do not go into a recession, we’ll be able to fund some of these programs as we go forward.”