DURING FREE FALL, VILLAGE AND CITY MAYORS LOOKING FOR A SAFE LANDING
In mid-April, only a few weeks into the “New York Pause” which was placed on non-essential businesses in response to the COVID-19 pandemic, a New York Times headline jumped off the page: Virus Forces a ‘Wartime’ Budget on N.Y.C., With $2 Billion in Cuts. The article highlighted the loss of billions in tax revenue, a crucial funding source for all municipalities large and small. That headline was less than a month ago, and since then things have gone from bad to worse.
Earlier this week, Governor Cuomo delivered the sobering news that New York State will need $61 billion in federal funding to avoid severe cuts to state aid directed at localities, particularly hospitals, schools and local governments. The Governor suggested state funding cuts as high as 20 percent among each of those groups.
This dire warning followed a report from State Comptroller Tom DiNapoli that showed local sales tax collections dropped 24.4 percent in April compared to April 2019, leaving New York’s local governments grappling with a $327 million shortfall in revenue for a single month.
While New York City and New York State’s budget woes are headline-worthy due to their sheer magnitude, the situation facing mayors from Binghamton to Freeport is just as desperate. The Mayor of Freeport in Nassau County and President of the New York Conference of Mayors (NYCOM) Robert T. Kennedy was recently quoted in the region’s largest paper saying his community is facing lost revenues from multiple sources, including recreation fees, building permits, business licenses and tickets issued by police. Upstate leaders like the Mayor of Binghamton in the Southern Tier and NYCOM First Vice President Rich David share similar concerns. Mayor David expects second quarter sales tax revenue to be down in the millions. To put that into perspective, sales tax revenue, at least for Binghamton, is the second largest source of revenue behind property taxes.
These numbers are crushing because our local governments depend on these revenues to provide basic services we all depend on. Our police and fire departments provide public safety. Public works pave your roads and pick up trash. Teachers educate your children. Local hospitals take you in when you are sick. All of these services have been challenged by this public health and economic crisis like never before. Schools are now being asked to teach children remotely, hospitals are scouring the internet for necessary supplies, and first responders are continuing to maintain law and order despite mounting personal risk. Our state and local infrastructure is being tested, and through it all has maintained the basic functions of government, but time and money are running out.
Mayors across the state are stuck between the proverbial rock and a hard place, where severely diminished local tax revenues intersect with the potential for dramatically reduced state aid. As they struggle with mid-year cuts and begin to develop their budgets for 2021, they face impossible decisions about where to reduce spending that in many cities, particularly in Upstate, never fully recovered from the last recession.
That is why the 575 Mayors that make up the membership of NYCOM are calling on both the state and the federal government to help their communities continue to provide the essential services that their citizens depend on. At the state level, we are requesting that Governor Cuomo must maintain his 2020-21 budget commitment in the form of Aid and Incentives for Municipalities (AIM).
At the federal level, NYCOM affirms that the next federal stimulus bill must provide support for states and municipalities of all sizes. New York has been ground zero for the COVID-19 virus, and as a result of our public health and safety efforts, our communities have helped slowed the spread to other parts of the country. The House of Representatives recently released the HEROES Act, a stimulus bill that would make significant strides toward easing the financial pain that local governments are experiencing, particularly via a $375 billion local government fund. If passed, those monies would help cities, villages and towns across the state and country maintain vital services during the pandemic and its aftermath. While it is difficult to predict how long the economic malaise will last, many experts believe it will be a long and difficult road for local governments as the economy slowly begins to recover.
Thankfully, it seems that New Yorkers’ efforts to stem the tide of COVID-19 through aggressive social distancing and pausing of non-essential businesses has been effective. It is somewhat comforting to know that all of the pain inflicted on our economy was not in vain. However, without stable state aid and new federal funding, the suffering will continue at the local level in the form of municipal layoffs and reduced services. Sadly, those layoffs will affect the very people who put themselves in danger to protect others, like hospital workers, police, fire and other essential public employees. Additionally, without the public services and infrastructure they rely upon, local businesses and economies will struggle to restart.
That is why we implore our state and federal leaders to do what is right and provide necessary funding to our local municipalities. Funding which will serve as a parachute – during an economic free fall – to help us get our feet safely on the ground.
Peter Baynes is Executive Director of New York State Conference of Mayors.