County governments and New York City have lost a combined $13.5 billion in economic activity over two fiscal years that could lead to cuts in spending for services as well as a permanent loss of jobs, the New York State Association of Counties warned in a report released on Monday.

What You Need To Know

  • County governments could be billions of dollars in the hole if federal aid does not come through in the coming weeks.

  • Layoffs and service cuts are a likely result.

  • The pandemic has wreaked economic havoc on local governments as revenue from casinos, sales taxes and hotel stays have virtually dried up.

  • Local government leaders say the current aid package proposal doesn't go far enough.

 The report comes as Congress is negotiating the next coronavirus stimulus package that could include billions of dollars in aid to governments on the state and local level around the nation after their finances were devastated by the pandemic-induced recession. 

For now, local government leaders view the current proposals in Washington as less than ideal for their own budgets.

“While there are elements of this plan that are laudable, it simply does not deliver for our residents who will face cuts to essential services, or for the essential workers who fought this pandemic on the front lines and now face layoffs," said Albany County Executive Dan McCoy.

"As Congress continues negotiations, we will remain laser focused on fighting to ensure that the final bill includes unrestricted and flexible aid to allow states and local governments to offset expenses and significant revenue loss attributable to COVID-19 so our essential workers can continue providing essential services.” 

The report pointed to the millions of dollars that have already been lost in sales tax revenue as commerce virtually halted in March and April and as the economy began to gradually reopn in May and June.

But there are other taxes local governments rely on that have also seen their spigot close, include occupancy taxes for hotel stays, revenues from gambling and state aid, which could be cut by as much as 20 percent. 

The long-term effects could be profound: Sustained unemployment in a state where the rate in June already stood above 15 percent statewide and more than 20 percent in New York City. 

“Counties have reached a critical juncture in which the loss of revenue due to reduced economic activity and increased expenses from COVID-19 response have pushed them to the breaking point," said John Marren, the chairman of the Ontario County Board of Supervisors and the group's president.

"Without direct, flexible state and local aid, counties across the state will be forced to cut local services and programs including transportation infrastructure improvement projects, services like county libraries and parks, senior meals on wheels, and human service programs benefiting thousands of New Yorkers."