Latest Economic Impact Report Details Devastating $25 Billion Drop in Revenue-Generating Sales

The New York State Association of Counties (NYSAC) released its fourth in a series of Coronavirus Economic Impact reports designed to highlight the impact the pandemic is having on business activity and county revenues. The report comes a day after the State Division of Budget released its First Quarter Financial Plan Update that estimates State coffers are facing a current year $14.5 billion deficit and a four-year $62 billion shortfall.

“This report is another piece of evidence in what has become an open-and-shut case for the need for direct federal aid to local governments.  As counties stepped up to respond to the pandemic, sales tax revenues, which are the lifeblood of local government, disappeared as the economy came to a screeching halt. Without federal aid, this lost revenue will jeopardize our ability to successfully reopen our economies and provide services for the families most impacted by the economic shutdown,” said NYSAC President John F. Marren, the chairman of the Ontario County Board of Supervisors.

NYSAC’s newest report, Taxable Sales Comparison, focuses on one of the key reasons for the state’s budget challenges: taxable sales activity during the March-April-May sales tax quarter. This period represented the deepest trough of the pandemic and included the most significant restrictions, to date, on economic activity in order to curtail and defeat the uncontrolled spread of the virus in New York. Taxable sales activity for this period were a staggering $25 billion lower than last year, down nearly 28 percent.

The report confirms NYSAC’s previous loss revenue projections that estimated that total lost revenues for counties and New York City over the 2020 and 2021 fiscal years could reach $13.5 billion (counties, $4.5 billion – New York City, $9 billion, not including state reimbursement cuts for the City).

“New Yorkers made huge sacrifices to flatten the COVID-19 curve, and our economy suffered dearly for it. Now we need help from the federal government to stay in the fight against the pandemic, provide local services and assist local families through the worst of this recession,” said Dan McCoy, Albany County Executive and President of the New York County Executives Association.

Since March, counties have been leading the state’s response to the pandemic by managing quarantine enforcement and support, leading 24/7 Emergency Response and 911 services, running testing facilities, conducting tracing operations, and providing food assistance to families and seniors.

“The loss in revenue and budget gaps will decimate every local health, safety, human service program, construction project, and job in their path. This is a national disaster that began as a public health emergency and evolved into an economic crisis that requires congressional leaders and the president to step up and pass a relief package that meets the magnitude of the moment comes to the aid of the governments leading the response to this pandemic,” NYSAC Executive Director Stephen J. Acquario.

You must be logged in to post a comment Login