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In the Face of an Unprecedented Revenue Crisis, County Leaders Call on Congress to Provide Additional Local Aid

Lost Sales Tax Revenue, State Cuts Threaten to Hinder County COVID-19 Response

 


In an online press conference today, two county leaders joined NYSAC to highlight how counties are responding to the COVID-19 pandemic and how, in the face of unprecedented declines in revenue, counties need direct assistance from the federal government to maintain these crucial operations.
Watch video of the event here.

County Executives Patrick Ryan of Ulster County and Ryan McMahon of Onondaga County joined NYSAC Executive Director Stephen Acquario to discuss specific programs they put in place in their counties to protect the health of their residents and prepare for restarting their local economies.

“County governments are facing a fiscal perfect storm as sales tax revenue have dried up at the same time counties are experiencing record demand for services,” said NYSAC Executive Director Stephen J. Acquario. “Now is not the time for counties to be making cuts to services or staff, but that's exactly what will happen without help from the federal government in the form of direct aid to local governments.”

Ulster County Executive Patrick Ryan said, “Counties are on the front line, delivering critical services that are in greater need than at any point in recent decades. The CARES Act was a good first step, but in New York State, 53 counties received no direct aid. In the next round, I believe it's critical—and frankly, essential—that every county receives direct support to cover the work that we've been doing and will continue to do.”

Onondaga County Executive Ryan McMahon said, “County governments are on the front lines of the fight against COVID-19. It's our local health departments, emergency management departments and more that are ensuring every possible resource is used to save lives. While we agree that we needed to shut down large parts of our economy to fight this virus, it also meant shutting down our main source of revenue – sales tax. Now we need help from the federal government to help make us whole so we can continue to deliver the services that our residents depend on and begin the process of restarting our economy.” 
 
 
Counties Leading

At the event, County Executives McMahon and Ryan outlined ways in which county government has played a crucial role in responding to the COVID-19 pandemic, slowing the spread of the virus and keeping their residents safe.
 
In Onondaga County, the county moved quickly to stop the spread of the virus closing schools and major retail outlets like Destiny USA. The county also led the state in launching a voluntary, two-week shelter-in-place campaign that asked residents to restrict their activity based on birth year. Recently, the county has been proactively testing in senior communities, finding positive cases of asymptomatic people and isolating them before they spread the virus.
Additionally, Onondaga County has teamed up with the ten counties in the Central New York and Mohawk Valley to develop a plan to take a tiered approach to restarting the economies in their respective communities.

In Ulster County, officials coordinated with their partners from Orange and Dutchess Counties to adopt a regional approach to school closures, closing schools ahead of the rest of the state and undoubtedly saving lives. They were the first county to independently set up mobile drive-through testing and have since expanded to three sites. The county set up triage site in a lower income community even before they had a confirmed case, to blunt the spread of the virus to vulnerable populations and they were one of the first counties to establish a fully staffed COVID-19 hotline.

Recently, County Executive Pat Ryan announced the launch of Ulster County Resilience Economic Initiative to accelerate and coordinate Ulster County's economic development efforts in the wake of the pandemic.

Revenue Loss 

As counties around the state are working to improvise and innovate in response to the virus, they are facing increasing financial pressure from the planned economic slowdown associated with social distancing measures.

According to data from the U.S. Census Bureau, the estimated change in advanced monthly retail sales for March was the largest one month decline on record at an estimated decline of -8.7 percent in overall retail activity.

These categories of economic retail activity represent some of the largest segments of the economy contributing to sales tax, a major source of revenue for county governments.
  • Motor Vehicle & Parts Dealers – loss of 23.7%
  • Gasoline stations – loss of 18%
  • Department stores – loss of 23.9%
  • Clothing & Accessories – loss of 50%

Additional sources of revenue loss include occupancy taxes and gaming revenues. Most counties have strong tourism industries and generate substantial hotel and motel taxes which are facing massive declines. Similarly, counties are looking a potential 50% loss in revenues from commercial and native American casinos, as well as the regional OTBs and VLT operations across the state.
 
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Media Contact: Mark LaVigne | MLavigne@nysac.org | 518-465-1473 x206

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