October 21, 2021

Cortland expects $1.8M budget shortfall

Cortland city officials are still trying to figure out what the COVID-19 pandemic will do to the city’s 2021 budget, but already estimate that lost state aid and other funding sources will cut nearly $700,000 in city income.

And that’s not counting for an expected decrease in sales tax revenue, about $1.1 million less than anticipated for 2020.

“It’s a guess at this time,” Mack Cook, the city’s director of administration and finance, said Monday. “It honestly depends on the vaccine, people’s spending habits and reducing the unemployment rate. We don’t know how the public health environment will be in the future.”

Mayor Brian Tobin said he expects major cuts in the 2021 budget, but remains unsure just what those cuts will be. He is giving department heads information about how their departments could be impacted by the 2021 budget.

“We’re in dire constraints,” he said. “We can’t have an unbalanced 2021 budget so there will have to be major cuts. It’s going to require a little cutting here and a little cutting there.”

Sales tax revenue now projected at $4 million for 2020, below an originally anticipated $5.1 million projected, Cook said.

With the way things are trending, Cook said the estimated sales tax revenue for 2021 is going to be about $4 million, although that could change depending on when the recession ends.

Money lost from sales tax revenue must either be made up from another source — such as the property tax levy, which is $9.02 million for 2020 — or cuts need to be made.

Among other income losses:

The city has lost $200,000 in SUNY impact aid — which is given to cities that host SUNY municipalities. Cook said he doesn’t expect the city to see those funds again for a while.

The city saw a 20% cut in Aid to Municipalities funding, about $400,000 from the $2.12 million the city typically gets.

The city expects to lose about $80,000 from the $401,000 it got this year in state Consolidated Local Street and Highway Improvement funding, Cook said.

The question that now has to be answered is the effect of the COVID-19 pandemic on consumer spending and the sales tax revenue that generates, Cook said.

“There’s a lot to still be figured out,” he said.

Neither Cook nor Tobin would speculate on the possibilities of furloughs being handed out again. The city laid off 33 employees in April – 18 of them full-time — although 14 were brought back in August.

“There will have to be compromises down the road,” he said.

The mayor expects to present his budget proposal to the Common Council in October. The council would vote on adopting a budget by Dec. 31.