October 22, 2021

Economic impact of coronavirus unclear

Cortland County Seal

If one thing is clear about the potential economic and budgetary effect of the coronavirus on Cortland County and its municipalities, it’s that the estimated loss of sales tax is unclear.

“It is still too early to determine how this will affect the county,” said Andrea Herzog, the county finance director.

County officials held a preliminary meeting “to talk about process and focus and the hope was to start looking at it starting in April,” she said Friday.

“I don’t know if this will be pushed back,” she said. “Last year, the departments were requested to have their budget requests in by the end of July. I haven’t heard that this deadline will change.”

For details

Read more analysis on the coronavirus package’s help for local governments at The Conversation: tinyurl.com/weyov3l

However, counties could see a loss of about $2 billion in local revenue, according to a report by the New York State Associations of Counties. That report looked at two scenarios: a mild recession and a quick recovery; and a more severe and prolonged recession.

This comes after state Comptroller Thomas DiNapoli had estimated the total state loss to be anywhere from $4 billion to $7 billion a couple weeks ago. Gov. Andrew Cuomo said it looks to be more like a loss of anywhere from $10 billion to $15 billion.

“Every level of government is going to feel the impact of the COVID-19 crisis, and local governments are bracing for that loss of revenue,” said Stephen J. Acquario, the executive director of NYSAC. “But we are also urging a partnership with the state as we confront the public health threat. We represent the same taxpayer at the local level and we have limited revenues. As the state enacts its operating budget, we ask for flexibility so that we can manage the fiscal impact locally. All units of government need a financial lifeline, and we will work with the state to rebuild the economy.”

The Homer Village Board announced at a meeting last week it is preparing to lose at least $75,000 in sales tax revenue.

That number is just the beginning though, said village Treasurer Tanya Digennaro. “After the first quarter we might have to adjust that,” she said.

The board also approved measures to cut spending or moving money into reserve accounts to lessen the blow on the 2020 budget.

Cortland Mayor Tobin said city officials will talk in the coming weeks about what the hit to sales tax will look like for the city for 2020 and the potential effect on the 2021 budget.

“The economic impact on the city I am concerned about,” Tobin said during his state of the city address Tuesday. “I am just as, if not more, concerned about the impact on our businesses because the impact on our businesses will also impact their employees, which are our people. Within next couple weeks, we’ll be discussing steps we can take and will take to minimize the impact on people in our community.”

In Cortlandville, Supervisor Tom Williams said discussions on the economic and budgetary fallout have happened, but that the board is waiting to see about “all this relief that’s supposedly coming our way and how that plays out.”

“The feeling was there’s not much sense in getting out ahead of that,” he said.

However, the economic relief from the $2 trillion stimulus package may not be much for municipalities, according to the “The Conversation,” a non-profit conglomeration of newsrooms partnering with academic institutions to provide insight into the news of the day.

“The stimulus is expected to pump $150 billion in aid to state and local governments,” states the article by Stephanie Leiser of the University of Michigan. “But with nearly 40,000 local governments across all 50 states, the money will be stretched thin and is likely to run out quickly.”

Much more will need to be done, said Leiser, a professor of public policy at the Gerald R. Ford School of Public Policy.

“Enduring this crisis will be painful for local governments and strict limits on revenue and expenditure growth will impede their recovery,” Leiser said. “If the stimulus package coming out of Washington fails to address the real constraints local communities face in battling coronavirus, we are likely to see unprecedented levels of fiscal stress and crisis in our cities, towns, and counties for years to come.”