NY County Executives Slam New COVID Stimulus For No Funding for State, Local Governments

Real Estate In-Depth | December 17, 2020

New York State County Executives Association President Marcus Molinaro

ALBANY—Chief officials of the New York State Association of Counties and the New York State County Executives Association were highly critical of the failure of Congress in federal stimulus negotiations to include state and local government aid in the estimated $900-million package.

NYSAC President Jack Marren and NYSCEA President Marcus Molinaro released a biting statement on ongoing COVID talks where House and Senate Democrats have compromised and withdrew much-needed state and federal COVID relief funding, while the Republican lawmakers have shelved attempts to enact COVID liability protections for businesses.

“Congress’s failure to reach a compromise on pandemic relief aid to states and local governments not only fails New Yorkers now, but it fails generations to come. They have failed our neighbors who need help, and taxpayers who are trying to make ends meet. They have failed the local health workers who have labored around the clock for nearly nine months to protect their communities from this terrible pandemic, and they have failed the thousands of county workers who have lost their jobs or may lose their jobs when counties make devastating program and staff cuts,” Marren and Molinaro, who is Dutchess County Executive, stated.

They added that local governments now face the threat of losses in $2 billion sales tax revenue and cuts in state reimbursement which total more than $600 million. That reimbursement deficit will grow as the state closes its $14 billion budget deficit, while COVID will continue to increase demand for social services like home heating, food stamps and meals on wheels.

Saying county and local governments are on the front lines of the public health, economic crisis, and social crisis, Marren and Molinaro noted, “The only way to reach the end of this pandemic successfully, to get our communities back to normal life and be prepared to respond to the next emergency, we all need to work together. We need our state and federal leaders to join with us, as partners in service to New Yorkers (and Americans), to ensure we have the resources we need to continue serving our communities.”

Gov. Cuomo, who has warned of possible significant tax increases, service cuts and layoffs if further COVID funding directed at state and local governments is not forthcoming, said on Wednesday that he is confident the Biden administration will push for and pass COVID relief for state and local governments in January or February of 2021. Therefore, he will wait until then before he attempts to fill the $14-billion deficit.

On Tuesday, the New York State Association of Counties released the 5th edition of its Coronavirus Economic Impact report series. The report, which evaluated taxable sales activity from March through August, found that while some areas of the state are seeing improvement in taxable sales activity, the results varied greatly depending on factors such as the severity of virus spread, the length of the economic PAUSE, and the mix retail and services in the community.

The report found that the June through August period saw improvements in taxable sales activity in many regions of the state as sectors of the economy gradually reopened beginning in the latter-half of May. Statewide, total taxable sales were down about $8.6 billion in the June through August period, about 9.0% over last year’s numbers. While still down overall, this represented an improvement over the prior quarter and 38 counties saw their taxable sales activity meet or exceed the 2019 levels for the June through August period.

“While certain areas of the state are seeing gradual improvements, we still expect that more than half of all counties and New York City will be far in the hole in sales tax receipts for their current fiscal year,” said NYSAC Executive Director Stephen J. Acquario. “Add to that the projected losses in hotel occupancy taxes, gaming revenues and the state reimbursement cuts of up to 20% and you’ve got a situation in which without direct federal aid from Washington, counties could be looking at additional cuts to services and staff right as the pandemic is picking up speed again.”

The report notes that since COVID restrictions began, taxable sales activity in several retail sectors have been sharply curtailed. During this period, taxable sales in the Traveler Accommodation (hotels and lodging) sector were down $5.4 billion statewide, or approximately 80% from March through August. The Restaurants and Other Eating Places sector was also down sharply during this same six-month stretch, down $10.3 billion in taxable sales, more than 48%.