Without Federal Relief, Cities Will Gut Their Budgets – Spectrum News

Town and city government officials in the Hudson Valley are preparing for an economic future that one elected official said could be “bad, very bad or excruciatingly bad.”

Officials from each municipality surveyed by Spectrum News this week agreed that without direct federal relief, local services would be slashed and layoffs would have to be considered in the coming months.

Future state funding is shrinking, and will continue to do so without federal intervention.

According to Governor Andrew Cuomo’s latest financial plan for the 2021 fiscal year, state aid to municipalities could be cut by more than $8 billion.

“Everyone needs to know what we’re up against, and to be transparent, and to be out in front of a problem,” Poughkeepsie Mayor Rob Rolison said of his decision to publicly explain what could happen to the local economy without federal aid.

Rolison recently instructed all city department heads, except police and fire, to cut their budgets by 15%. Rolison said that based on early projections, the city budget is facing a shortfall of $5.5 million.

Sales tax revenue that is shared by the county with municipalities each quarter will be lower in the second quarter of the year.

Parking meters and enforcement revenue, which was projected to be $2 million, could end up being just $1 million, Rolison said.

“Revenue is not going to meet the expected budgetary amounts because of COVID,” Rolison said Tuesday morning in a Zoom interview. “We’re going to be short that kind of money, and we’re going to have to make drastic cuts on the city budget unless we do get some sort of relief from the federal government.”

In Kingston, Mayor Steve Noble has instructed all departments to issue new financial plans, Alderman Rennie Scott-Childress said when reached by phone Tuesday.

He told Spectrum News that Kingston’s property tax revenue is expected to come up short, as well as revenue from building inspections and permits.

Revenue from parking will dip sharply as parking meters are covered and fees are suspended. Those losses may lead to difficult decisions come mid-summer.

“There are no specific hits to revenue yet,” Scott-Childress said. “We have a little bit more time to deal.”

Newburgh city officials have not publicly offered details on a plan to make up for revenue losses.

The city of about 28,000 people was saved from near insolvency in November when the council approved the layoffs of 25 police officers and fire fighters.

“We’re going to wait and see,” City Manager Joseph Donat told Spectrum News over the phone Monday afternoon. “We’re waiting on the second quarter numbers to come in … We do expect serious financial constraints.”

A key second-quarter figure to any municipality will be its share of revenue from the county’s sales tax.

Through a formula, each quarter, municipalities receive a certain portion of the county’s total sales tax revenue. Cities will receive less, but it is too early to determine how much less.

A recent study by the New York State Association of Counties put forth two possible recession scenarios that found Orange County could lose between $10 million and $30 million in sales tax revenue this year.

In the severe scenario, one in which the state’s economy would be frozen for a longer time, some counties could lose up to a quarter of their yearly sales tax revenue.

Newburgh city council members said the city comptroller sent them a financial memo related to the economic shake-up, but they have not discussed it in public meetings and would not immediately share it with Spectrum News.

City Manager Joseph Donat said Tuesday he will make the proper redactions and release the memo “at some point in the near future.”

City Comptroller Todd Venning refused to comment on the city’s finances when reached by phone Monday.

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