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County governments fear economic distress from coronavirus impact

Posted 17 March 2020 at 8:24 pm

Press Release, New York State Association of Counties

New revenue forecasts released today by the New York State Comptroller have counties concerned about compounding economic distress that will impact taxpayers, services, and staffing at the local level.

New York State Comptroller Thomas DiNapoli today announced that the economic slowdown caused by the COVID-19 pandemic will cost New York State between $4 and $7 billion in revenues for the next fiscal year that starts on April 1.

“The amended revenue forecast released by the Comptroller is very troubling for local governments and property taxpayers,” said NYSAC President John F. (Jack) Marren. “Local taxpayers will face challenges on four separate fronts at a time when we are fighting the coronavirus outbreak. The first will be an increased demand for health and human services during a recession, the second is a loss in critical local sales tax revenues we use to fund state and local services delivered in our community, the third will come in the form of looming cuts from the state budget, and the fourth will be further reductions in local quality of life services.”

The Comptroller’s estimates assume the ultimate impact is a mild recession, the higher end of the range assumes something more severe. These estimates are also before the consideration of any federal stimulus that may be forthcoming which could provide significant help to the economy and state receipts, such as an increase in federal Medicaid matching funds which would directly benefit the State Financial Plan.

“Our county leaders understand that all levels of government and all facets of society will be severely impacted by the response to COVID-19, but we also believe that the state and federal government needs to invest in our communities because we are on the front lines of fighting the spread of the coronavirus, and helping the people most impacted by an economic downturn,” said NYSAC Executive Director Stephen J. Acquario.

A forthcoming report from NYSAC will project that the loss in sales tax revenues will exceed $1 billion for county governments across the state. This does not account for the local workforce related revenue losses, and the costs associated with responding to the COVID-19 pandemic.

“Counties are concerned that this fluctuation in projected revenue could result in cuts to state aid that help to fund vital services such as public health, services for older Americans, and public safety operations such as 9-1-1 dispatch services and sheriff road patrol,” said President Marren. “Any reduction in state assistance during this emergency public health response will compound the negative revenue outlook that counties are facing.”

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