County sales tax took $500K hit in April

By Tom Rivers, Editor Posted 17 May 2020 at 12:17 pm

Orleans already facing $1 million revenue loss due to Covid-19 pandemic

Photo by Tom Rivers: The business district with many of the fast food chains on Main Street in Albion is pictured on a recent evening. Sales tax revenues plummeted in the county in April. Many local businesses are closed and restaurants that are open are limited to takeout or delivery.

ALBION – Sales tax revenues, an indicator of sales activity in the local economy, plunged in April across in Orleans County and across the state.

In Orleans, the local sales tax revenue dropped by $514,000, from $1.4 million in April 2019 to about $900,000 last month, according to the State Comptroller’s Office and the NYS Department of Taxation and Finance.

Jack Welch

That 36.9 percent drop was the second worst among 62 NY counties. Only Madison County, at a 40 percent drop, took a bigger hit. State-wide, the average decline was 24.4 percent.

Jack Welch, chief administrative officer for Orleans County, said plunging sales tax paints a dire picture for the county.

He was hoping the county would face about a $500,000 loss in sales tax for the whole year, not a month, during the Covid-19 pandemic. That was in a mild scenario.

The county receives about $17 million in sales tax a year. It shares about $1.3 million with the four villages and 10 towns in the county. Those municipalities can expect less money this year in sales tax, Legislature Chairwoman Lynne Johnson advised them during a conference call on Saturday.

“I want the towns to realize it won’t be business as usual with making you whole,” she told the municipal leaders. “We cannot issue you checks for cash we do not have, so budget accordingly.”

Welch said he fears the economic damage will be worse than imagined only a few weeks ago. In addition to plummeting sales tax revenue, the state Office of Court Administration notified the county it wouldn’t be paying to have deputies provide security in the courthouse after June 30. The state provides about $350,000 to county for the annual security contract. The contract allows the county to pay the salaries and benefits of three deputies.

The state has also intercepted federal funding for job development programs provided by the county.

Welch said the shrinking sales tax, loss in state courthouse security contract and intercepted job development funds amounts to a $1 million hit to the county budget.

The county last month temporarily laid off 34 workers and isn’t filling 10 other vacant positions to ease some of the budget pain.

The county’s economy is suffering. In the past two months, 3,331 people filed unemployment claims in the county. That is 20 percent of the workforce.

Orleans is in the Finger Lakes Region, which on Friday started phase 1 of reopening the economy.

Johnson, the Legislature chairwoman, urged residents to adhere to social distancing, wearing face masks and washing their hands frequently to limit the spread of Covid-19. If the infections don’t spike, the county and region should be able to advance to the four phases of reopening the economy.

“We need to do everything we can to get our Main Street up and running,” she said.

Gov. Andrew Cuomo also is pushing hard for a federal stimulus package that would help state and local governments in this time of plunging revenue. He is asking for $61 billion in New York for the state, school districts, healthcare systems and the local governments.

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