There are 30 local governments in New York that have some form of financial strain made all the harder by the COVID-19 pandemic, Comptroller Tom DiNapoli found in a new report assessing municipal budgets in the state.
The biannual fiscal stress report of local governments comes as the state and local governments are recovering from the budgetary hit taken by the pandemic over the last 18 months thanks in large part to rebounding sales tax and an infusion of federal aid.
Nevertheless, the local governments placed on the list of fiscal stress may have longer term, structural budget issues facing them. The three communities under the most financial strain are the city of Poughkeepsie, the city of Niagara Falls and the town of Caneadea.
Suffolk and Westchester counties, as well as the city of Glen Cove and town of Yates, are under "moderate" budget stress, according to the report.
“New York’s local governments have overcome some major fiscal hurdles during the COVID-19 pandemic,” DiNapoli said. "Federal assistance, the restoration of state aid and resurging revenue have provided them much needed relief. However, those designated as stressed are less likely to have the flexibility to adapt to fiscal challenges long term. Local officials must budget and plan carefully to avoid fiscal stress and manage their communities through the uncertainties created by the pandemic.”
The pandemic led to a freeze on economic activity that only truly began to thaw more than a year later in the spring of 2021. Local governments as a result lost tax revenue, responded to the public health crisis and had to consider which services to provide amid a pandemic.
Sales tax revenue has quickly bounced back this year, however, with many county governments outside of New York City seeing higher growth. At the same time, the state received billions of dollars in federal aid meant to make communities financially whole in the wake of the crisis.
The full report can be found here.