In June, New York State began withholding 20% of both Aid & Incentives for Municipalities (AIM) as well as transportation aid from cities across the state. It cut into the bottom lines of cities like Buffalo, Rochester, Syracuse, and Albany, which respectively took budget hits of $33 million, $22 million, $18 million, and $3 million.

Under the governor’s executive budget proposal released Tuesday, it was announced that the 20% withholding of local aid in the current state budget will be reduced to 5%. This will still leave $63 million in cuts to local governments. For the upcoming state fiscal year, the governor proposes $56 million in cuts to AIM funding to cities, villages and towns (a 20% cut for most), assuming there is only $6 billion in relief from the federal government. If the federal government comes through with the $15 billion requested by the governor, those proposed cuts in local aid would be rescinded.

Peter Baynes, executive director of the New York Conference of Mayors, says the loss will be deeply felt.

"This will cause tremendous pain at the local level, both in terms of tax increases, service reduction and layoffs," he told Capital Tonight.

When asked what his members are planning to do if they don’t receive all the funding the state owes them, Baynes said they’re looking at layoffs, service reductions, raising taxes and tapping into reserve funds.

Additionally, Baynes says, the public sector comprises 15% of the state’s economy. If New York State continues to withhold any funding, the ripple effect will contribute to a further economic downturn.