Jim Franco did a nice job (See: The cost of COVID, Aug. 5-11, 2020) ) in explaining the risk for county governments from the decline in sales tax revenues which may be in the range of about 25 percent or more.
As we approach the fall many local governments will enter a new budgeting season where difficult decisions will have to be made given the large declines in local government revenues. The development of these budgets which commences in September will be interesting to watch.
Here are four key items to look for. First, the financial status of the local governments is important. This can be measured by looking at the bond ratings as issued by Moody’s Investors Service. County and town governments generally have higher bond ratings than city governments. City governments should, therefore, be under more fiscal stress than most county and town governments. An exception is the Town of Colonie which has one of the lowest bond ratings of any of the larger town governments in New York State.
The second item to examine is the percentage of local government revenues that comes from sales taxes. County governments are more at risk since they generally have a greater percentage of sales tax revenues than town and city governments.
The third factor concerns the Fiscal Stress Monitoring System which is normally published by the Office of the New York State Comptroller in September. Currently the Town of Colonie and the cities of Amsterdam, Albany, Watervliet and Montgomery County are on the fiscal stress list.
The fourth factor is the New York State property tax cap. This mechanism limits the amount of property tax that can be increased by the localities.
Each of these four issues will be interesting to watch as local governments develop their new budgets this fall.
— Kevin Bronner Sr.,