By Thomas P. DiNapoli
Congress and President Trump are confronted with one urgent task: They must come to a bipartisan agreement on the next installment of federal stimulus legislation.
Let’s do it right: The federal response must fill the revenue gaps for state and local governments created by the pandemic. Washington must act now to avoid needless harm to Western New Yorkers and communities across the country. Our families need support from their state and local governments – not cuts to essential services or tax increases.
The economic impact of Covid-19 has produced dramatic drops in government revenue. State tax revenue in New York was down $1.5 billion, or 17.3%, in June compared to last year. In Western New York, sales tax receipts from April through June were down by $45.8 million from the previous year, including a drop of $35.9 million in Erie County.
Already, the state Division of the Budget has temporarily withheld more than $1.5 billion in payments to local governments and others. This includes $19.6 million in aid to Buffalo, where needs are many and revenue options are few.
Without additional aid from Washington, more cuts from the state are likely for schools, health care providers, human services organizations and other direct services. Balancing the state budget with a projected $8.2 billion in local assistance cuts would transfer the state’s shortfall to localities already facing unprecedented revenue drops.
This could drive reductions to a wide range of local services or increase property taxes, when we can least afford it. This would also make it impossible for communities to stabilize, provide testing and tracing to combat the pandemic, and support the economic recovery.
Many local governments have warned that revenue shortfalls will force layoffs or furloughs of staff, including police, firefighters and health care workers.
Congress has provided some financial support, but far too little to fill the gap. For most local governments facing significant budget holes, the response from Washington is this: zero.
The federal government has come through before. In response to the 2008-09 Great Recession, federal aid to New York’s local governments outside New York City increased by nearly 60%. The economic toll of Covid-19 has been more immediate and more extreme than the Great Recession, and a full federal response is required once again.
We need financial support from Washington so that New York and local communities can start the difficult task of repairing the damage this pandemic has inflicted.
Thomas P. DiNapoli is New York State’s comptroller.