Counties face 26% sales tax loss

Mark Gutman/Daily NewsDrivers pump gas at Red Apple on Ellicott St. in Batavia on Friday afternoon. Over the first month of the economic lockdown, sales tax in counties statewide is down by an average of 26 percent from the same time last year.

The New York State Association of Counties says counties across the state, on average, were making 26 percent less in sales tax money in the first month of the economic lockdown than they were at the same time last year.

In its recently updated Coronavirus Economic Impact on Counties report. NYSAC listed a couple of scenarios as estimates for what might happen to local sales tax this year. Under NYSAC’s “milder” recession scenario, Genesee County may have a taxable sales loss of $104,856,265 and a sales tax loss of $4,194,251, Livingston County $78,926,581 and $3,157,063, respectively, Orleans County $34,130,127 and $1,365,205, and Wyoming County $41,240,795 and $1,649,632.

NYSAC said these estimates are to show a range of impacts for counties, not specific predictions.

The report says that under a “more severe” recession, Genesee County would have a taxable sales loss of $249,741,078 and sales tax loss of $9,989,643, Livingston County $189,897,466 and $7,595,899, Orleans County $82,778,443 and $3,311,138, and Wyoming County $98,406,808, and $3,939,472.

GENESEE COUNTY MANAGER Jay Gsell Friday said Genesee County had the information earlier this week when it discussed the updated NYSAC report during a Ways and Means Committee meeting.

“NYSAC had told us they updated the report they had from a month ago. The numbers have gone significantly south by county,” he said. “These are strictly estimates. They’re using the term ‘possible scenarios for sales tax.’”

The first-quarter (February through April) sales tax payment the county received was $5,220,138.99. Gsell and Genesee County Treasurer Scott German said the first sales tax payment the county received for the second quarter of 2020, which came in Thursday, was 26.02 percent lower than the payment a year ago. This year’s first second-quarter payment was $1,853,670.74.

“Next week, we receive our second payment. After that, we’re done for May,” German said.

German said the sales tax payment goes into the county’s general fund. He said he didn’t know what amount to expect beforehand for the first second-quarter payment.

“Yesterday’s (Thursday’s) payment was the first payment since the PAUSE (New York State on PAUSE) period began. The second payment’s a lot lower, usually, than the first payment,” he said.

The county treasurer said the decrease in sales tax was a tremendous hit to the general fund.

“Working with the Legislature, we are taking steps to stop any capital expenses — capital projects, asset acquisition, possibly using reserve funds that were for other uses, and reallocate those to the general fund — to save monies to prevent devastation to the general fund ...” he said. “Furloughs have helped.”

Gsell said he saw the sales tax payments some of the other county managers reported Thursday and that a 26-percent drop from a year ago was the average across the state.

“There was no county response line I saw yesterday that was not negative,” Gsell said, adding there may have been a county with a decrease of about 50 percent from the year before.

NYSAC NOTES that this is a rapidly developing economic situation and revenue conditions could change in either direction quickly.

“These new numbers lend extra weight to what we were already predicting, that the bottom has fallen out from under local governments just as they’re beginning to gain ground against the coronavirus and making plans for reopening,” said NYSAC President John F. Marren. “Counties will continue to work with our state and federal partners to secure the funding necessary to maintain essential services and build the foundation for a resilient recovery.”

These numbers come on the heels of an updated report on the economic impact of the coronavirus on New York’s counties that projects potentially catastrophic drops in revenue between $1.5 billion to $3.6 billion over the next year.

The report details how counties face a quadruple threat of:

• declining local revenues, especially sales tax, but also hotel occupancy taxes, mortgage recording taxes, gaming revenues, among other revenues;

• higher spending necessary to respond to the health emergency and meet the state’s requirements for reopening;

• the loss of state reimbursement; and

• the potential of significant losses for small businesses on our main streets that could threaten jobs and the property tax base over the short to mid-term.

NYSAC said weekly unemployment claims show an increase in New York is many multiples greater than in past recessions. Claims in four weeks, ending April 18, are about 27 times as large as they were in the same period last year. Even though many counties have not yet been hit hard by COVID-19 confirmed cases, every county has seen a dramatic increase in unemployment claims.

The NYSAC report says in Genesee County, there were 3,546 unemployment claims in the four weeks ending April 18, an increase of 3,373 from the 173 claims for the same four weeks last year. In Orleans County, there were 2,297 claims in the same four weeks this year compared to last year, 2,185 more than last year’s 112 claims. Wyoming saw 2,307 claims during this period, 2,172 more than last year’s 135. For Livingston, the claims were 3,655 for four weeks this year, 3,449 more than the 306 from a year ago.

In the meantime, Wyoming County announced the creation of a recovery task force.

The task force will focus on completing the necessary steps to reopen Wyoming County for business in the aftermath of COVID-19, county officials said Friday in their daily update. Members will include representatives from Wyoming County business and agriculture.

More details will be made available in the future, the officials said.

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