By Derickson Lawrence
To be sure, the Office of the State Comptroller (OSC) deserves high marks for establishing a fiscal stress tool-kit for local governments. According to the OSC, “fiscal stress” refers to the difficulties in generating enough revenues to meet expenditures in the long term. And it measures a local government’s ability to balance its budget, pay its bills, keep its debt in check and have some funds left over at the end of the fiscal year. But even that fiscal stress tool-kit appears dated in today’s COVID-19 pandemic.
As the epicenter of coronavirus pandemic, New York State’s “stay-home” requirements created a ghost town in Times Square, and in every mall, Main Street, and municipality. “In terms of the economic dislocation, I think it’s fair to say we are going to quickly surpass anything we saw in the Great Recession,” said New York City’s Mayor Bill DeBlasio.
In a move to get a jump on “flattening the curve,” to avert straining the state’s health care infrastructure Governor Cuomo suggested that, “We can’t win on defense. We win on offense.” Those remarks should apply to the economic front, as well. According to WAMC.Org News, referring to the pending April 1 budget, Senate Leader Andrea Stewart-Cousins (D- Yonkers) said the entire spending plan has to be reevaluated. “Every assumption has to be adjusted for the realities that we are in.”
COVID-19 Fiscal Stress Report
Helping local governments (counties and municipalities) cope and deal with those new realities should be the subject of the updated “COVID-19 Fiscal Stress Report.” Equally important to include in the report, is the “tough love” with “kisses and sweeteners” to address the expense side of the budget. How do you make personnel cuts in this setting? Compassion reigns supreme, and for good reason. The alternative then becomes unthinkable: raising taxes.
With New York having three of the highest property taxed counties in the nation (Westchester, Rockland, Nassau) and with no real solutions to the “SALT” deduction cap, the Governor’s decision to push the State’s filing deadline to July 15, may be a recognition of the people’s pain.
This lag in state revenues will no doubt necessitate some innovative budget responses, which local governments may attempt to emulate. Invariably they will need some contour and structure. Moreover, opportunities to fill the broader $15 billion revenue budget gap – despite New York’s share of the recent $2 trillion federal relief package — are slim without a fourth federal rescue package that considers the proportionality of the devastation sustained by New York. To make matters worse, the timeline for that aid is unclear.
Flattening the Curve
This is where we can “win on offense”: by not flattening but crushing the curve of ailing municipalities. Without the contour, structure, and compliance timelines to guide local governments, from the OSC, many of them, including my home city of Mount Vernon, will need the equivalent of COVID-19 ventilators to keep them from going under.
The writer is the chairman of the City of Mount Vernon Charter Revision Commission, and is a former 2018 Candidate; U.S. Representative, NY 16th District.
