Local governments in New York are heavily dependent on sales tax revenue, which has all but disappeared amid the coronavirus pandemic as people stay home and shop less, a report released on Wednesday by Comptroller Tom DiNapoli found.
The report pointed to the $17 billion in sales tax revenue brought in by local governments last year, accounting for nearly 10 percent of their revenue.
Outside of New York City, local governments rely even more on sales tax as a source of revenue, with counties taking in 28.7 percent of its revenue from sales taxes and city governments 18.9 percent. This money, in turn, helps offset other costs for local governments, including increasing property taxes.
New York City collected nearly $8 billion in sales tax, making up 8.7 percent of its revenue.
“COVID-19 has decimated local sales tax revenue this year, blowing holes in the budgets of municipalities across New York State,” DiNapoli said. “As we work to rebuild our economy, we must also help repair the damage that has already been inflicted. Just as our Main Street small businesses can’t rebuild alone, our local governments don’t have the means to do this themselves. Direct aid from the federal government is needed to help our communities recover.”
Local governments could still face deep cuts in state aid unless federal support is approved by Congress and President Trump this year.