Here's another metric for how bad the fiscal picture looks for government finances: Sales tax revenue for local governments in New York dropped 27.1 percent in the second quarter, a report released Friday by Comptroller Tom DiNapoli's office found.
The report found local governments took in $3.3 billion in sales tax from April through June, a drop of $1.2 billion from the previous period last year.
The sales tax drop came as New York's economic shutdown amid the coronavirus pandemic was in full force and beginning to gradually unwind as virus cases dropped in May and June.
“Although there was a glimmer of hope in June, second quarter sales tax figures show how deep the COVID-19 pandemic is cutting into municipal finances,” DiNapoli said. “Collections are down markedly, especially in New York City, revealing the effect of the pandemic on consumer behavior. We'll be watching July closely to see the impact of the phased-in openings in different regions.”
And the report comes as the federal government is considering another pandemic stimulus package that could include direct aid to local governments affected by the crisis. New York state has threatened budget cuts of up to 20 percent for local governments in the meantime.
The lack of revenue could lead to service cuts or tax hikes in some instances. Many county governments are able to keep other taxes, including property taxes, lower by relying on sales tax revenue.