New York Counties May See Sales Tax Losses of $2 Billion (1)

New York counties are facing a quadruple threat of declining local revenue, higher costs, loss of state reimbursement and potentially significant losses for small businesses because of the coronavirus pandemic, according to a report released by the New York State Association of Counties.

• New York’s regional governments are now facing a potential $2 billion loss in revenues, the association said in a statement on Monday
• “These revenue forecasts are very troubling for local governments and property taxpayers,” NYSAC President John Marren, said in the statement. “We’ve never seen anything like this, ever.”
• In the report, NYSAC had outlined two scenarios for revenue loss estimates: a mild recession and a quick recovery versus a more severe and prolonged recession
  • Under the mild scenario, sales tax revenue in counties outside New York City would fall about 4% below baseline growth in 2020, amounting to a loss of $350 million on a full-year basis
  • Under the more severe scenario, sales tax revenue would fall about 12% below the baseline for a $1 billion loss
  • The more-severe of the two scenarios “in no way represents a worst case”: report
  • The most recent projections from the state has doubled the range of impact to a $2 billion loss in local stales tax revenue: statement
  • Governor Andrew Cuomo is now projecting state revenue losses between $10 and $15 billion
• “Significant” state aid reimbursement cuts to counties and local governments should be anticipated

(Updates with association statement updating loss estimate)

To contact the reporter on this story:
Danielle Moran in New York at dmoran21@bloomberg.net

To contact the editor responsible for this story:
Elizabeth Campbell at ecampbell14@bloomberg.net

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