Local Government Sales Tax Collections Fell 8.2% in July

Real Estate In-Depth | August 2020

ALBANY—As the New York State economy continues its reopening process and the state continues to post low COVID infection numbers, local sales tax collections are improving, although still down compared to last year.

Sales tax revenue for local governments in July fell 8.2% compared to the same period last year, according to New York State Comptroller Thomas P. DiNapoli. Collections for counties and cities in July totaled $1.3 billion, or $116 million less than in July 2019. Although revenue is still down compared to July 2019, the decline is less steep than any month since March, when the COVID-19 pandemic began to affect sales tax collections, the State Comptroller’s Office reported.

Nearly every county in every region of the state saw overall July collections drop year over year. Only four counties had increases, including Westchester where its tax rate increase in August of 2019 boosted year-over-year growth by 18.7%. County decreases ranged from 2.1% in Essex to 19.7% in Schuyler. New York City experienced a 7.3% decline, amounting to a $44.6 million reduction in revenues. While less dramatic than the 46% ($375 million) decrease seen in June, this represents another month where the city’s sales tax revenue dropped significantly over the same month in the prior year.

Other Mid-Hudson counties all registered sales tax declines in July as compared to July 2019 with Orange County posted the largest decrease at 12.7%, followed by Rockland (-8.4%), Sullivan (-7.9%) and Putnam (-7.5%).

Yonkers posted the largest decline in sales tax revenue in July at 12.1%, followed by New Rochelle (-10.6%), White Plains (-9.7%) and Mount Vernon (-1.4%.

“New York’s local governments continue to see a significant downturn in sales tax collections, a major source of revenue. This is going to have a long-lasting effect on revenues for counties, cities and many towns and villages around the state,” DiNapoli said. “The federal government needs to step up and provide financial help to those hit hard by this virus. Without action, communities may need to make severe cuts to critical services.”

Last month, DiNapoli reported that local sales tax collections dropped 27.1% in the April-June quarter, down $1.2 billion from collections in the same quarter of 2019.

Over the five-month period of the pandemic’s effects (starting in March, when only New York City showed losses, and continuing through July), local governments have received $1.4 billion (18.7%) less than they did during the same period in 2019.

Collections for the month of June showed some improvement in most regions. Total collections were down 25.4% compared to June 2019, largely due to a steep decline in New York City. Most counties saw an improvement compared to the significant drops in April and May, and many had year-over-year June increases.