New York- Lost Revenue and State Aid Cuts Coronavirus Economic Impact on Counties


The COVID-19 pandemic has impacted every aspect of our society, government and the economy like no other event in our lifetimes. In March, the New York State Association of Counties (NYSAC) completed an initial economic analysis of the coronavirus on counties.

In the March report, under the mild scenario, we projected sales tax revenue in counties outside New York City would fall about 4 percent below baseline growth in 2020, for a loss of about $350 million on a full-year basis. In this May update, under the milder scenario we are projecting sales tax revenue outside New York City would fall about 9 percent, for a loss of about $780 million.

In the March release, under the more severe scenario, we projected sales tax revenue would fall about 12 percent below the baseline, or approximately $1 billion on a full-year basis. In this May update, under the severe scenario we are projecting sales tax revenue outside New York City would fall about 22 percent, for a loss of about $1.8 billion. Under both reports the numbers reflect gross local sales tax before sales tax sharing and the diversion of AIM-related payments.

The state is also facing revenue shortfalls, particularly in its income, sales, and profits-based taxes. In the Enacted State Financial Plan the state is projecting an additional shortfall of $13.3 billion and indicating that, without additional federal support to help replace lost revenues, state aid to localities may have to be cut by 20 percent to 50 percent.


For more information: NYSAC

NYSAC
May 2020