New Sales Tax Data Reinforce Troubling Findings of COVID-19 Economic Impact Report
First Look at Counties Sales Tax Collection for Four Weeks on Lock-Down: Statewide Drop of 26%
The New York State Association of Counties today announced that this week, counties received their first installment of sales tax directly related to the first month where the statewide lock down on economic activity was in effect. In aggregate, the county sales tax collections compared to the same period last year were down about 26 percent. This ranges from about 16 percent to nearly 37 percent by county (not including tax rate changes).
The new sales tax data bolster the estimates made under the “severe recession” scenario outlined in NYSAC's recently updated Coronavirus Economic Impact on Counties report, which projected decreases of 22 percent over the next year.
NYSAC notes that this is a rapidly developing economic situation and revenue conditions could change in either direction quickly.
“These new numbers lend extra weight to what we were already predicting, that the bottom has fallen out from under local governments just as they're beginning to gain ground against the coronavirus and making plans for reopening,” said NYSAC President John F. Marren. “Counties will continue to work with our state and federal partners to secure the funding necessary to maintain essential services and build the foundation for a resilient recovery.”
These numbers come on the heels of an updated report on the economic impact of the novel coronavirus on New York's counties that projects potentially catastrophic drops in revenue between $1.5 billion to $3.6 billion over the next year.
The report details how counties face a quadruple threat of:
- Declining local revenues, especially sales tax, but also hotel occupancy taxes, mortgage recording taxes, gaming revenues, among other revenues;
- Higher spending necessary to respond to the health emergency and meet the State's requirements for reopening;
- The loss of state reimbursement; and
- The potential of significant losses for small businesses on our main streets that could threaten jobs and the property tax base over the short to mid-term.
“This is having an immediate and dramatic impact on local government operations as county officials assess cash flow needs and update their revenue projections for the coming year,” NYSAC Executive Director Stephen J. Acquario said. “Counties are reviewing all options, including hiring freezes, workforce furloughs and temporary layoffs, delaying infrastructure projects, halting new procurement and other essential and non-essential services and community improvements, among other cost savings measures—all while addressing the public health and safety emergency before us.”