The New York State Association of Counties released an updated economic impact report in late July that says counties and New York City face a catastrophic $13.5 billion loss in revenue over two fiscal years because of COVID-19 circumstances that could lead to significant cuts to services and permanent layoffs, slowing the economic recovery and threatening gains made against the virus.
“This is terrible news for New York and the United States as the taxpayers of New York are major donors to the United States Treasury,” an organization statement said.
The group said a U.S. Senate plan from the Republicans fails to deliver aid to state and local governments.
“While there are elements of this plan that are laudable, it simply does not deliver for our residents who will face cuts to essential services, or for the essential workers who fought this pandemic on the front lines and now face layoffs. As Congress continues negotiations, we will remain laser focused on fighting to ensure that the final bill includes unrestricted and flexible aid to allow states and local governments to offset expenses and significant revenue loss attributable to COVID-19 so our essential workers can continue providing essential services,” said Dan McCoy, Albany County executive and president of the New York State Association of County Executives and County Executives of America.
“Counties have reached a critical juncture in which the loss of revenue due to reduced economic activity and increased expenses from COVID-19 response have pushed them to the breaking point. Without direct, flexible state and local aid, counties across the state will be forced to cut local services and programs including transportation infrastructure improvement projects, services like county libraries and parks, senior meals on wheels, and human service programs benefiting thousands of New Yorkers,” said John F. Marren, president of the New York State Association of Counties and chairman of the Ontario County Board of Supervisors.
“Part of the economic recovery is investing in America’s future. We are out of time—Congress must act to provide significant aid to states and counties and they must do it now. State and local governments compromise nearly 15 percent of the gross domestic product. Without federal assistance, counties will have no choice but to make layoffs permanent and eliminate local services – risking the health and well-being of our most vulnerable residents and jeopardizing the fragile economic recovery,” said Stephen J. Acquario, NYSAC executive director.
The report says:
• Sales tax is the number one source of county revenue for nearly half of all counties and averages over 20 percent of local revenue
• Over the next 12 months we project sales tax losses could be between $1 billion to $1.3 billion for the 57 counties (not including New York City). Including New York City, the sales tax losses over the next 12 months could reach $3.2 billion
• Hotel occupancy taxes are down nearly 80 percent in most counties since COVID
• Gaming revenues have stopped completely since COVID. For the next year we expect these revenue losses to range between $57 million to $86 million
The report also notes that state and local governments are major employers and provide nearly 12 percent of all U.S. jobs. Economists have noted that in the last downturn, during the Great Recession, the federal government’s austerity approach and prematurely ending financial assistance to states and local governments contributed significantly to the slow recovery, both in employment terms and contributions to gross domestic product.
A bi-partisan group of county executives called on congressional leaders and the president to compromise on a new federal stimulus package that provides funding for states and local governments.
